Economists and business people are telling us inflation is going to plummet - but householders think it's going to rise.
Participants in the Reserve Bank's household expectations survey are forecasting inflation of 3.2% over the next year, while over half of them are worried about losing their jobs.
The inflation results are markedly different to what economists are suggesting and indeed what was suggested by the RBNZ's recent survey of business leaders, which posted a record fall in inflation expectations.
On house prices, the householders are a little more on the same page, predicting a fall in the next year. However, they are picking a fall of just 0.5%, while many economists are picking around 10%, and the RBNZ itself expects a 9% drop over the rest of this year.
The RBNZ said the householders expectations of one-year ahead inflation increased to 3.2%, (weighted mean) up from 2.6% recorded last quarter.
"...There was more variation in one-year ahead inflation expectation estimates provided by respondents this quarter," the RBNZ said.
"This could be due to uncertainty surrounding the future impacts of the Covid-19 pandemic."
The weighted mean expectation for one-year ahead house price inflation decreased to -0.5% from 4.6%. Respondents who expect house prices to decrease were most likely to be from the Wellington region (47%), followed by Canterbury (40%). The net proportion of respondents expecting higher house prices has fallen to 0.2%, down from 73.9% last quarter.
The survey put in some extra questions this time around in response to the impact of Covid-19.
"Over one-half of workers are worried about their job security, particularly among younger people," the RBNZ said.
"Around 60% of respondents usually in paid work reported feeling at least slightly worried about having a job in 3 and 12 months’ time. Those aged 18-29 years old were more likely to express feeling at least slightly worried about their job security compared with those in older age brackets (e.g. 73% of respondents aged 18-29 reported feeling this level of concern compared with 58% of those aged 45-59 years old).
"Renters are more worried about making rental payments than mortgagors making mortgage repayments. Some 61% of renters said they were at least slightly worried about missing 1 or more rental payments in the next 3 months.
"Almost one-in-ten (8%) reported they were paying reduced rent for the place they normally live due to the impact of Covid-19, while 86% said they were paying full rent.
"Looking at the situation for mortgagors, just under one-half (46%) of mortgagors reported feeling at least slightly worried about missing 1 or more mortgage repayments in the next 3 months. Most said they would take a mortgage holiday (46%) and/or shift to interest-only repayments (41%) if they were at risk of missing a repayment."
The data is sourced from UMR Research’s nationwide omnibus survey, which is an online survey of a nationally representative sample of 1056 New Zealanders aged 18 years and over. The fieldwork for this quarter was conducted online from 21st April to 1st May 2020.