Cost of living: Annual household living costs increased 7 per cent - who was hit hardest?

Petrol was the second-largest contributor to the average household's living costs. Photo / NZME

Household living costs rose 7 per cent in the 12 months to the December 2023 quarter, outpacing inflation, Stats NZ said today.

But the cost of living for the average household may have peaked, as it was lower than the 7.4 per cent increase recorded in the September 2023 quarter.

“Inflation, as measured by the consumers price index [CPI], eased more than the cost of living over 2023‚” said Stats NZ’s consumer prices manager James Mitchell.

“This is because our cost of living measure includes different ongoing costs that aren’t included in the CPI, such as interest payments, which have increased by 31 per cent for the average household over the past 12 months.”

The largest contributors to households’ living costs were interest repayments (up 31.2 per cent), private transport supplies and services (such as petrol) which increased 9.0 per cent and rent (up 5.1 per cent).

Highest-spending households were the hardest-hit group, with living costs rising 7.3 per cent. This was followed by Māori, who saw their costs increase 7.1 per cent.

Beneficiaries experienced a 6.2 per cent increase in living costs.

The household living-costs price indexes (HLPIs) measure how inflation affects 13 different household groups.

“For each of the household groups, the cost of living increase was above 6 per cent for the 2023 year,” Stats NZ’s Mitchell said.

“Groups with a higher proportion of spending on mortgages had interest payments as the largest annual contributor to their cost of living. For groups that paid less in interest payments, their cost of living was still being driven by food and housing costs.”

The average household living cost of 7 per cent compares to an annual inflation figure of 4.7 per cent for the December quarter.