Annual rent rises hit low-spending households – Media release

9 February 2017

Beneficiaries and low-spending households experienced the highest inflation over the past year, Statistics NZ said today. From the December 2015 quarter to the December 2016 quarter their overall costs increased 1.4 percent. This was more than double the rate of inflation experienced by New Zealand's highest spenders (up 0.6 percent).

"Higher costs for rent, and cigarettes and tobacco, had a greater effect on lower-spending households," consumer prices manager Matt Haigh said, "Rent was up 2 percent this year, with the largest increases being observed in Auckland."

Living costs for all households were up 1.0 percent in the year to December 2016, compared with the 1.3 percent CPI increase. The 'all households HLPI' does not include the large price increase in purchase of new housing (up 6.5 percent), but does include mortgage interest payments (down 1.1 percent).

Prices for luxury items up in the December quarter

The December 2016 quarter showed a change in household distribution of inflation. Living costs for households with high spending rose the most, up 0.5 percent, due to higher prices for air transport, petrol, and mortgage interest. Mortgage interest rates fell in December, but higher house prices pushed overall interest payments up.

Beneficiaries experienced less inflation in the latest quarter, up 0.1 percent. This group had less discretionary spending on flights, package holidays, and new cars, which all increased in price. There was less effect from rent increases in the quarter than over the year. December quarters typically have fewer rent increases, before they rise again in March quarters.

Difference between the HLPIs and the CPI

The household living-costs price indexes (HLPIs) look at typical inflation experienced by 13 different groups, including beneficiaries, Māori, superannuitants, and 10 other groups of people who have varying income and spending patterns. The CPI is a national average measure of price change that New Zealand households experience.

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