Consumer spending has risen strongly, led by spending in cafes and restaurants.
Figures from Statistics New Zealand show the seasonally adjusted value of retail sales rose 0.9% to more than $18 billion in the three months to June, compared with the previous period.
The volume of sales rose 1.7%, with spending in cafes, restaurants and bars recording its largest increase since the series began in 1995.
ASB Bank chief economist Nick Tuffley says a buoyant housing market is underpinning retail spending.
He says most categories registered an increase in volume over the quarter.
"In particular what we're seeing is that those housing related categories so that's a lot of the furniture, and homeware and electronics for example are still registering some very healthy volumes growth."
People also spent more in department stores and on cars, electronic goods, and hardware and building supplies, helped by a high New Zealand dollar that made foreign-made goods cheaper.
Mr Tuffley says price pressures in the retail sector remain subdued, but there are signs some retailers are cutting back on discounting.