Inflation and interest payments soar
![Household living costs surge](https://cdn-res.keymedia.com/cdn-cgi/image/w=1000,h=600,f=auto/https://cdn-res.keymedia.com/cms/images/us/076/0321_638576129505116963.png)
The cost of living for the average New Zealand household increased by 5.4% in the 12 months to the June quarter, following a 6.2% increase in the previous quarter, according to Stats NZ.
“Mortgage interest payments remain high and continue to make a significant contribution to living costs for many households,” said James Mitchell (pictured above), consumer prices manager at Stats NZ.
Inflation trends and comparisons
Inflation, as measured by the Consumer Price Index (CPI), was 3.3% for the same period, down from 4% in the March quarter.
The CPI measures inflation for New Zealand as a whole, whereas the household living-costs price indexes (HLPIs) focus on specific household groups.
Interest payments and living costs
Interest payments surged by 26.7% in the 12 months to June, significantly impacting household budgets. The cost of building a new home rose by 3% in the same period.
“Interest payments remain high, making a significant contribution to living costs,” Mitchell said.
Beneficiary household costs
Stats NZ figures showed that the cost of living for beneficiary households increased by 4.5% over the year, with rent, transport supplies, and interest payments being the main contributors.
Rent alone increased by 5.1%, reflecting the significant portion of income these households spend on housing.
Māori household costs
Māori households saw a 5.5% increase in living costs, driven by a 26.4% rise in interest payments, 13.4% increase in transport costs, and a 5.2% rise in rent. These increases highlight the financial pressures faced by this group.
Superannuitant household costs
For superannuitants, the cost of living rose by 4.6%, with insurance costs up by 19.8%, transport supplies up by 12.9%, and property rates increasing by 9.7%.
“This is the last quarter we will see the impact of rates increases that households saw in the second half of 2023,” Mitchell said.
Highest-spending and lowest-spending households
The highest-spending households experienced a 5.6% rise in living costs, driven by a 27% increase in interest payments, a 12.9% increase in transport supplies, and a 16.5% rise in insurance costs.
For the lowest-spending households, living costs increased by 5.0%, with significant contributions from a 5.3% rise in rent, a 19.8% increase in insurance, and a 13.1% increase in transport supplies, Stats NZ reported.
Read the Stats NZ media release here.
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