Statistics NZ has confirmed that household living costs price indexes (HLPI) increased by an average of 5.2% during the last quarter of 2021, as compared to the same period the year before. This is the highest increase since the metric was first tracked in 2008 for 7 of the 13 housing groups measured. All groups experienced a higher increase in their cost of living as compared to the December quarter of 2020.
This figure not only factors in consumer pricing but also homeowners mortgage interest payments. It however does not include the impact of rising property pricing on new homes. The consumer price index (CPI) rose by 5.9% during the December quarter of 2021. It gauges national inflation by tracking the prices of specific goods and services.
More affluent households were found to be more negatively impacted by rising costs, particularly from mortgage interest payments, petrol costs, and second-hand vehicles. This increase of about 5.4% was much higher than in earlier periods when lower increases in living costs were experienced by high-income households. This grouping was found to be spending as much as 7.3% of their expenditure on interest payments, compared to just 4.6% for the average household.
Those in high and middle-income household groups were found to have experienced a similar 5.4% increase in their cost of living, partly attributed to the 5.2% of spending that went towards petrol expenses. Petrol prices have been on the rise in 2021, affecting all demographics.
This is a change from previous reports that found that those on fixed incomes such as pensions and beneficiaries were the worst affected by inflation. This time around, superannuants were found to have experienced a lower 5.2% increase, similar to the overall average. Beneficiary households suffered a lower 4.8% increase in their cost of living with just 2.1% of their expenditure going towards interest payments.
According to consumer prices manager, Katrina Dewberry, this could be attributed to such households typically having to spend less on petrol and interest payments than the average family. She also noted that though interest payments were now on the rise since rates started falling in 2018, they were still at a lower level than they were 2 years ago.
The cost of living for Maori households was also found to be slightly above average at 5.3%. This result was driven by the increased cost of housing rentals, mortgage interest payments, and petrol costs. Maori households were found to be spending an average of 20% of expenditure on rent, compared to the national average of about 14%.
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