ANZ-Roy Morgan Consumer Confidence survey shows that young adults and first-home buyers are feeling much less confident about their lot

Young people and first home buyers are feeling a lot less confident about life than they were, according to the latest ANZ-Roy Morgan Consumer Confidence Survey.

The surveys' results come at a time when the Reserve Bank is considering applying "speed limits" on high loan to value lending - a move that would affect the ability of young, first-time buyers to get a home. The results also come at a time when there are expectations that interest rates will start to rise again soon - with fixed mortgage rates edging up - while house prices are continuing to rise.

"Young adults and first home buyers recorded the largest reduction in confidence – they are the most exposed to rising interest rates," ANZ economist Steve Edwards said.

"Respondents aged between 18 and 24 years recorded the largest easing in confidence, dropping 11 points to [an index score of] 128. The next-oldest age cohort (25-34 years old) reported the second-largest easing in confidence, dropping 7 points to 121,": he said.

Auckland was the only region to record a lift in confidence, rising 3 points to 124.

"This improvement coincided with the Government’s announcement of a major investment in the city’s transport infrastructure," Edwards said.

Canterbury, which saw a six-year high in confidence a month ago on the back of the Christchurch rebuild,  recorded the largest reduction in confidence, falling 15 points to 119.

Auckland's positive sentiment is also being driven by the fact that it is in the engine room of strongly rising house prices. 

Edwards said that for the second successive month, house price expectations lifted in Auckland and Canterbury. Those for Canterbury rose 0.3 percentage points to 5.6%, a new high, while Auckland recorded the second-strongest rate, at 4.8%.

He said an improvement in wealth through rising house prices in NZ’s largest real estate market (Auckland) continued to guide purchasing trends for major household items.

"Three out of every five respondents believe it is a good time to buy a major appliance – unchanged from last month and a whisker below the five-year high of 62% measured two months ago." 

Overall consumer confidence remained high, though it decreased slightly this month.

For the first time in three months, however, a greater share of respondents felt that versus a year ago they were worse off financially (34%, versus 31% feeling better off).

"Rising petrol prices eating into disposable incomes are the likely cause of this turnaround. In conjunction, higher longer-term fixed mortgage rates over the month are a hint of things to come for homeowners," Edwards said. 

But overall, a robust confidence reading was signalling stronger economic growth is around the corner, Edwards said.

"While easing marginally in July, consumer confidence remains not far off the three-year high seen in June, while business confidence was also strong last month. Our combined business and consumer confidence measure is indicating economic growth will accelerate to around 4% by the end of the year, which would be the economy’s best performance since 2007," he said.