Household inflation surged by 5.4% in the year ending June 2024, driven largely by increased mortgage repayments and higher insurance premiums, according to Statistics New Zealand (Stats NZ).
Despite this uptick, there is a positive trend as household living costs have moderated significantly from their peak of 8.2% recorded in the 12 months to December 2022. The latest figures show a decrease from the 6.2% inflation rate observed in the previous quarter (March 2024).
For the June 2024 quarter, the household living costs price indexes (HLPIs) revealed that substantial contributors to inflation included mortgage interest repayments, which soared by 26.7%, insurance costs up by 18%, and private transport supplies and services, including fuel, which climbed by 13%.
The HLPIs assess inflation’s impact on 13 distinct household groups, as well as a comprehensive all-households group. Unlike the consumer price index (CPI), which includes the cost of constructing new homes, the HLPIs incorporate interest repayments, providing a more targeted measure of household inflation.
James Mitchell, consumer prices manager at Stats NZ, noted, “Mortgage interest payments remain elevated, continuing to significantly impact living costs for many households.”
In contrast, the cost of new home construction rose by 3% during the same period.
For Māori households, living costs increased by 5.5% over the 12 months leading to June 2024, a decrease from the 6.3% rise recorded in March 2024. The most significant contributors to this increase were interest repayments (+26.4%), private transport supplies and services (+13.4%), and rent (+5.2%).
Current CPI data indicates that overall inflation is trending back towards the Reserve Bank’s target range of 1-3%.
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