Mortgage, rent, and insurance costs up
The cost of living for New Zealand households has risen 3.8% over the past year, according to Stats NZ’s latest data.
The increase, tracked by the household living-costs price indexes (HLPIs), follows a 5.4% rise recorded for the year ending in June 2024, signaling a slight easing but persistent pressure on household budgets.
Interest payments and insurance lead cost increases
Key factors driving this rise include an 18.2% increase in mortgage interest payments and a 16.4% rise in insurance costs.
“Mortgage interest payments remain high and continue to contribute significantly to living costs for many households,” said Nicola Growden (pictured above), consumer prices manager.
Meanwhile, rent saw a 4.8% uptick, impacting especially those with limited spending power.
Cost of living increases across household types
Stats NZ reported increases across various household groups, with some differences in primary cost drivers:
- Beneficiary households saw living costs rise 3.8%, with rent and tobacco prices as significant contributors.
- Māori households experienced a 3.9% increase, affected by similar factors including rent and tobacco.
- Superannuitants saw living costs climb 3.9%, driven by insurance and property rates, which weigh more heavily on retirees who often own homes outright.
- Lowest-spending households faced the highest increase at 4.3%, with property rates, rent, and insurance as major contributors.
HLPIs and CPI: Different measures, different purposes
While the HLPIs focus on specific household groups, the consumer price index (CPI) reflects national inflation trends, which showed a 2.2% rise over the same period.
The HLPI’s inclusion of interest payments, which surged 117% over the past three years, contrasts with the CPI’s emphasis on broader economic impacts, like the cost of new housing construction.
Rising costs spur focus on household needs
With the cost of living still climbing, Stats NZ noted that the largest pressure points continue to be mortgage interest, rent, and insurance.
Superannuitants, beneficiaries, and low-income households are especially affected by these rising costs, underscoring the ongoing financial challenges faced by different groups across New Zealand.
Read the Stats NZ media release for more details. To compare the latest figures with the June quarter results, click here. For the June quarter CPI results, click here.
Get the hottest and freshest mortgage news delivered right into your inbox. Subscribe now to our FREE daily newsletter.
