Key Facts
- The cost of living for New Zealand households increased by 6.2% in the year to March quarter.
- Interest payments on debt surged 28% over the same period.
- Other major contributors to living costs were rent, private transport supplies and services, and insurance.
- The rate of living cost increase has been slowing down, decreasing from 7% in the December 2023 year and 8.2% in the December 2022 year.
- Cost of living for beneficiaries and superannuitant households increased by 5.3% and 5.2% respectively.
- Cost of living for Māori households and highest-spending households increased by 6.3% and 6.6% respectively.
- Cost of living for lowest-spending households increased by 5.7%.
Article Summary
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.
