New Zealand

Household spending rises - but not a splurge

09:35 am on 27 November 2012

Households are once again spending more than they are earning.

The latest figures are a turnaround from last year when spending was less than earnings for the first time in a decade.

Last decade's splurge reached its height in 2003 with households spending nearly $1.10 for every dollar they earned.

The shortfall slowly closed up and by 2011 earnings were exceeded spending.

Now, in 2012, Statistics New Zealand says spending is exceeding earnings, albeit by a tiny amount - just one tenth of a cent more than every dollar earned.

And Institute of Economic Research principal economist Shamubeel Eaqub says households' saving habits haven't suddenly gone back to those of the last decade.

He says that is evident in the housing market, where buyers are still fronting up with large deposits despite being bombarded by banks with offers to lend up to 95% of the purchase price.