NZ card spending: Housing market slowdown weighing on spending growth - Westpac

Michael Gordon, Research Analyst at Westpac, explains that the New Zealand’s housing market slowdown appears to be weighing on consumer spending growth.

Key Quotes

“Spending on debit and credit cards was little changed in September. Retail spending rose just 0.1%, less than we and the market expected. Some of the shortfall was due to fuel spending, which rose just 0.9% despite an estimated 5% rise in fuel prices over the course of the month.”

“Card spending in the core retail groups fell slightly. There was a solid 0.8% rise in spending on consumables, but spending was down for durable goods, clothing and hospitality.” 

“Consumer spending has cooled significantly in recent months - in fact, the level of card spending is down since the start of the year. Consumer spending in New Zealand tends to have a strong link with the housing market, and the slowdown in spending is consistent with the cooling in house prices over the last year. In the absence of a renewed fall in interest rates, we expect the housing market, and therefore growth in consumer spending, to remain subdued over the next couple of years.”