Rising inflation and higher interest rates are weighing on consumers' appetite to spend.
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The ANZ-Roy Morgan Consumer Confidence survey eased by 1 point in October to 97, which indicates pessimism among households.
A net 6 percent of respondents thought it was a bad time to buy a major household item, which is a key indicator of consumer sentiment.
Consumers' inflation expectations eased over the month from 6.2 percent to 5.7 percent, however this is still the second-highest reading in the survey's history.
"Households have been more clued up than anyone when it comes to inflation in the past 18 months," ANZ chief economist Sharon Zollner said.
"Households' real discretionary income has taken quite a hit recently. Although jobs are plentiful, most people have experienced a real wage fall, given CPI inflation is near 5 percent and rising."
Those with mortgages are now either paying significantly more interest, or at least seeing it coming down the pipeline, Zollner said.
The proportion of respondents who thought they would be better off financially in a year's time eased 5 points to a net 15 percent, while house price inflation expectations fell by nearly 1 percent.
Strong gains in the paper value of many properties in the past year had boosted households' sense of wealth, compelling them to spend.
But Zollner said anecdotal evidence suggests that the enthusiasm for purchasing is falling away, as higher mortgage rates, stretched affordability and the fear of missing out wanes.
"The days of your house paying for your new car are probably behind us for a while.
"Indeed, just as the RBNZ over-achieved on stimulating the housing market on the way up, there is a real risk that they may over-achieve in cooling it down, hitting consumer confidence."
