Household living costs up 5.4%

Friday, 26 July 2024

It’s still getting more expensive to live in New Zealand, but the rate of growth is slowing

Household living costs rose 5.4% in the year to June, with transport, mortgage interest and rent among the contributors

Interest payments increased by 26.7%

Household living costs rose 5.4% in the year to June, according to Stats NZ.

The increase, measured by the household living-costs price indexes (HLPIs), follows a 6.2% increase in the year to March 2024 quarter.

The most recent high was 8.2% recorded in the 12 months to December 2022.

Meanwhile, inflation – as measured by the consumers price index (CPI) – was 3.3% year to June 2024, following a 4% increase in the 12 months to March.

That figure was down from the most recent high of 7.3% in the 12 months to the June 2022 quarter.

The HLPIs are a quarterly measurement of how inflation affects 13 different household groups, plus an all-households group, also referred to as the “average” household, while the CPI measures how inflation affects New Zealand as a whole.

The HLPIs include interest payments, while the CPI includes the cost of building a new home.

Stats NZ consumer prices manager James Mitchell said mortgage interest payments remained high and were still making a significant contribution to living costs for many households.

Interest payments increased 26.7% in the 12 months to the June quarter. The cost of building a new home increased 3% in the same period.

Other contributors to increased living costs for most household groups were private transport (including petrol), insurance, and rent.

Here’s how different households were affected:

Beneficiary households

The cost of living for beneficiary households increased 4.5% in the year to June, following a 5.3% increase in the 12 months to March.

The largest contributors to increased costs for this group were rent (5.1%), private transport (12.8%) and interest payments (25.2%)

Rent makes up 29% of beneficiary household expenditure, compared with 13% for the average household.

Māori households

Living costs for Māori households increased 5.5%, down from 6.3% in the year to March.

The largest contributors to increased costs were interest payments (26.4%), private transport (3.4%) and rent 5.2%.

Superannuitant households

The cost of living for superannuitant households rose 4.6% in the year to June, down from 5.2% in the year to March.

Insurance was the largest contributor to increased costs for this group, up 19.8%. Insurance makes up 6% of household expenses for superannuitants, compared with 4.1% for the average household.