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New household living costs data shows the wealthier have been helped by falling interest rates, while rising petrol prices are putting pressure on poorer households.
Stats NZ said New Zealand households had an average increase in living costs of 2.1 percent in the year to the March quarter.
The rate is lower than the consumer price index (CPI) inflation rate of 3.1 percent because the household data includes the impact of interest rates, which Stats NZ recorded their largest annual fall since the series began 18 years ago.
There was a 20.9 percent decrease in mortgage interest payments over the year.
This benefited higher-spending households the most.
The group of highest-spenders had the lowest annual inflation rate of all groups, at 0.7 percent because they spend more of their spending on interest.
Reserve Bank data shows that in March last year, the average new special two-year home loan rate was just over 5 percent. By November, it had fallen to 4.5 percent.
Rates have since started to pick up again.
“Falling interest payments for households was the main reason for the lower increase in the cost of living compared to New Zealand’s overall inflation rate,” prices and deflators spokesperson Nicola Growden said.
Petrol price pain starts to bite
But for the three months to March, rising petrol prices started to put pressure on.
Petrol was up 3.5 percent, pharmaceutical prices up 17.7 percent and electricity up 2.6 percent.
Lower-spending households were most affected by higher petrol prices because more of their spending has to go on petrol. They also spent more of their money on electricity.
“Some lower-spending households allocate nearly 5 percent of their spending on petrol, whereas the average household spends less than 4 percent, and highest-spending households less than 3 percent,” Growden said.
For highest-spending households, petrol contributed 33.2 percent to their quarterly inflation rate of 0.2 percent.
The prescription count for the prescription subsidy scheme reset on 1 February 2026, meaning households who had previously exceeded the 20-prescription threshold, and were receiving free prescriptions, now had to pay the prescription co-payment.
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