Housing costs push up annual inflation

16 October 2019

The consumers price index (CPI) increased 1.5 percent in the September 2019 year, influenced by higher prices for rents, and cigarettes and tobacco, Stats NZ said today.

This increase was partly offset by decreasing prices for vegetables, petrol, and telecommunications equipment.

In the September 2019 quarter, the CPI rose 0.7 percent, driven by price rises for local authority rates and payments, vegetables, and meat and poultry. This was partly offset by falling prices for fruit, petrol, and new cars.

Cost of running a household on the rise

Various household costs rose over the year to September 2019.

Housing and household utilities increased 3.0 percent, with increases for rents and construction of new homes. Insurance premiums also increased.

“Household costs increased over the past year, although prices for construction of new homes, local authority rates, and insurance increased at a slower rate this year than last year,” prices senior manager Paul Pascoe said.

In the year to September 2019:

• local authority rates and payments increased 4.9 percent, compared with 5.1 percent in the year to September 2018. Local authority rates and payments come through in the September quarter each year
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• construction of new homes increased 2.8 percent, compared with 4.1 percent in the September 2018 year
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• dwelling insurance increased 7.6 percent, compared with 16 percent in the year to September 2018
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• contents insurance increased 3.5 percent, compared with 4.3 percent in the year to September 2018.
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While the price of dwelling insurance continued to increase, it is lower than the 13 percent annual average of the last two years.

“Higher insurance premiums last year were partly due to an increase in the Fire and Emergency Services levy,” Mr Pascoe said.

“This year’s increase in local authority rates is slightly less than last year’s, but higher than the 4.4 percent annual average over the last five years and over double the rate of general inflation.”

Rents increased 2.9 percent for the September 2019 year. This was up from 2.3 percent in the September 2018 year.

“The increase in rents was felt more in some regions than others, up 4.1 percent for the year in Wellington compared with 1.8 percent in Auckland and 1.3 percent in Canterbury,” Mr Pascoe said.

Not all rents go up year to year, so the actual change felt by any individual renter may differ from the average.

Wellington also had the strongest increase in the price of building new homes, increasing 4.0 percent in the year to September 2019 compared with a 2.7 percent increase in Auckland and 1.4 percent increase in Canterbury.

Rents, construction of new homes, and rates contributed to the 3.2 percent increase in domestic (non-tradeable) inflation. This is the largest annual increase since September 2011, when GST increased from 12.5 percent to 15 percent.

Transport prices tick up in September quarter despite price falls for petrol and new cars

Transport prices rose 0.5 percent in the September 2019 quarter.

Vehicle relicensing fees contributed to a 6.6 percent rise in other private transport services.

“The rise in vehicle relicensing fees, which came into effect on 1 July 2019, is due to changes in the way ACC assess the risk of different vehicle types. Road user charges also increased on 1 July,” Mr Pascoe said.

Insurance premiums for vehicles also rose, up 1.1 percent in the September quarter and 8.4 percent in the year.

Partly offsetting these rises were petrol prices, which fell 0.8 percent in the September quarter.

The weighted average price of 91 octane, after discounts (for the whole of the September quarter) was $2.11 per litre, down from $2.13 in the June quarter. Weighted average diesel prices fell 5.9 percent to $1.42 per litre.

“While we saw price rises at the pump late in the quarter, prices for July and August were lower than we saw throughout the June quarter,” Mr Pascoe said.

Prices for new cars were also down 2.1 percent in the September 2019 quarter. This was due to a combination of specials and new models being introduced. Prices for used cars rose 1.1 percent.

Seasonal fruit and vegetable price rises push up quarterly food prices

Rising prices for tomatoes and lettuce helped push fruit and vegetable prices up 1.9 percent in the September 2019 quarter.

Overall, food prices were up 1.3 percent in the September quarter.

“Although tomato prices fell in the September month, prices rose in both July and August pushing the price up 58 percent in the September quarter,” Mr Pascoe said.

“These rises were partly offset by a fall in avocado prices, down 57 percent in the September quarter.” Carrot prices down to seven-year low has more on the most recent food price changes.

Rising prices for meat, poultry, and fish, up 3.4 percent, were the top contributor to the rise in food prices this quarter.

Video

View a video summary of the Consumers price index: September 2019 quarter on the Stats NZ YouTube channel after 11am today.

The Government Statistician authorises all statistics and data we publish.

For more information about these statistics:

• Visit Consumers price index: September 2019 quarter

• See CSV files for download

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