The living cost for an average New Zealand household has seen an increase of 6.2% in the year to the March quarter, a result of a 28% climb in interest payments on debt, says Statistics NZ. This is distinct from the Consumers Price Index (CPI) which rose 4% over the same period, but does not include interest payments. James Mitchell from Statistics NZ indicates that the high rates of mortgage interest relative to 2021 have significantly contributed to increased living costs.
Other areas that contributed to increasing living costs are rent, private transport supplies and services, including petrol, and insurance which increased 9.6% and 17.9% respectively. These costs are still below their peaks from 2022 when the CPI climbed to 7.3% in the June 2022 quarter.
There are disparities among different household groups. Beneficiaries saw a cost of living rise by 5.3%, mainly due to increases in rent, interest payments, and cigarette and tobacco prices. The cost for Māori households went up by 6.3% due to increases in interest payments, rent, and private transport supplies. Superannuitants experienced a 5.2% increase in living costs, largely driven by costs related to insurance and property rates. The highest-spending households and lowest-spending households saw their living costs elevate by 6.6% and 5.7%, respectively.
These trends underscore the rising challenges New Zealanders face amid increasing living expenses. Households will need to factor these increases into their future budgeting and financial planning decisions.
Key Facts Prime Minister Christopher Luxon did not explicitly say he wanted average house prices to fall, seeking only “downward pressure”. Housing Minister Chris Bishop stated that house prices need…