18 Jun 2013

Return to debt-fuelled spending seen

10:43 am on 18 June 2013

Fears are growing that households are falling back into bad habits of spending more than they earn.

The latest quarterly survey by Westpac-McDermott Miller found consumer confidence surged surged to a three year high, fueled by low interest rates, a robust housing market, cheaper foreign goods, and the prospect of a higher dairy payout.

Westpac chief economist Dominick Stephens said there are signs some people are returning to their high-spending ways. The number of people saying they would rather spend than save is the highest since 2004.

He said the shift away from savings is particularly pronounced among older households and Aucklanders', who have benefitted from an upturn in the housing market.