Increasing prices continued to affect all household groups in the 12 months to December 2022, Stats NZ said today.
The cost of living for the average household (as measured by the household living-costs price indexes) increased by 8.2 percent in the 12 months to December 2022.
Inflation experienced from the December 2021 quarter to the December 2022 quarter:
- all households was 8.2 percent
- beneficiary was 6.9 percent
- Māori was 8.1 percent
- superannuitant was 7.4 percent
- highest-spending households was 9.4 percent
- lowest-spending households was 7.1 percent.
“Higher prices for housing, food, and transport were the main contributors to the increase across all household groups,” consumer prices manager James Mitchell said.
Each quarter, the household living-costs price indexes (HLPIs) measure how inflation affects 13 different household groups, plus an all-households group. The consumers price index (CPI) measures how inflation affects New Zealand as a whole.
The all-households group, or the average household, represents all private New Zealand-resident households. Lowest-spending, middle-spending, and highest-spending groups relates to expenditure quintiles 1, 3, and 5.
Household living-costs price indexes (HLPIs) – DataInfo+ has more information about the different household groups.
Annual inflation, as measured by the CPI, was 7.2 percent in the December 2022 quarter , while annual inflation for the average household as measured by the HLPIs was 8.2 percent. The two measures of inflation are typically used for different purposes. A key use of the CPI is monetary policy, while the HLPIs is to provide insight into the cost of living for different household groups.
One important difference between the two is the treatment of housing. The CPI captures the cost of building a new home, while the HLPIs capture mortgage interest payments.
How housing costs are measured in consumer price indexes at Stats NZ has more information about how housing costs are measured in the CPI and HLPIs.
In the HLPIs, interest payments increased by 45 percent for the average household in the year to December 2022. In the CPI, the cost of building a new home increased by 14 percent in the same period.
“The official cash rate, used by the Reserve Bank to control inflation, increased from 0.75 percent in December 2021 to 4.25 percent in December 2022,” Mitchell said.
“This is reflected in the HLPIs by higher costs for interest payments.”
| Quarter | Interest payments |
| Dec-19 | 1000 |
| Mar-20 | 996 |
| Jun-20 | 976 |
| Sep-20 | 914 |
| Dec-20 | 882 |
| Mar-21 | 888 |
| Jun-21 | 900 |
| Sep-21 | 897 |
| Dec-21 | 951 |
| Mar-22 | 1070 |
| Jun-22 | 1181 |
| Sep-22 | 1295 |
| Dec-22 | 1377 |
Interest payments main contributor to higher living costs for highest-spending households
Highest-spending households’ cost of living increased 9.4 percent in the year to December 2022. This is the highest annual increase of all the household groups. The main contributor to this was higher interest payments, because highest-spending households spend more of their expenditure on interest payments than other household groups.
Proportion of household spending on interest payments:
- all households was 4.7 percent
- highest-spending households was 7.4 percent
- lowest-spending households was 2 percent.
Lowest-spending households’ living costs increased 7.1 percent
The cost of living for lowest-spending households was 7.1 percent in the 12 months to December 2022.
“This was driven by higher prices for rent, grocery food, interest payments, and fruit and vegetables,” Mitchell said.
“Lowest-spending households spend proportionally more on grocery food, fruit and vegetables, and meat, poultry and fish, and proportionally less on restaurant meals and ready-to-eat food than the average household,” Mitchell said.
For lowest-spending households, overall food prices increased 11 percent. Grocery food prices increased 10 percent, and fruit and vegetable prices increased 21 percent.
Cost of living for beneficiary households increases 6.9 percent
The cost of living for beneficiary households increased 6.9 percent in the 12 months to December 2022. This follows a 6.6 percent increase in the year to September 2022.
“This was due to higher prices for rent, interest payments, and food such as grocery food, and fruit and vegetables,” Mitchell said.
Rent makes up about a third of beneficiary household expenditure. This compares with 13 percent for the average household and 5 percent for highest-spending households.
| Household group | Housing rentals (percentage) | Interest payments (percentage) |
| Beneficiaries | 29.7 | 2.2 |
| Expenditure quantile 1 (lowest-expenditure households) | 18.2 | 2 |
| Māori | 19.1 | 5 |
| All households | 13.4 | 4.7 |
| Superannuitant | 7 | 1.2 |
| Expenditure quantile 5 (highest-expenditure households) | 4.7 | 7.4 |
Māori households’ cost of living increased 8.1 percent
The cost of living for Māori households increased 8.1 percent in the 12 months to December 2022.
The main contributors to higher living costs for Māori were interest payments, rent, grocery food, and fruit and vegetables.
Between December 2021 and December 2022 prices for:
- interest payments increased 45 percent
- rent increased 5.4 percent
- grocery food increased 10 percent
- fruit and vegetables increased 20 percent.
Superannuitant cost of living increased 7.4 percent
The cost of living for superannuitant households increased 7.4 percent in the 12 months to December 2022. This compares with 8.2 percent for the average household.
Grocery food, fruit and vegetables, and passenger transport services (such as international and domestic airfares) were the main contributors to the rise.
