Household Living Costs Increase 2.4 Percent

The cost of living for the average New Zealand household increased 2.4 percent in the 12 months to the September 2025 quarter, according to figures released by Stats NZ today.

The 2.4 percent increase, measured by the household living-costs price indexes (HLPIs) follows a 2.6 percent increase in the 12 months to the June 2025 quarter. The most recent high was 8.2 percent recorded in the 12 months to the December 2022 quarter.

Meanwhile, inflation - as measured by the consumers price index (CPI) - was 3.0 percent in the 12 months to the September 2025 quarter, following a 2.7 percent increase in the 12 months to the June 2025 quarter. The most recent CPI high was 7.3 percent, recorded in the 12 months to the June 2022 quarter.

The HLPIs measure how inflation affects 13 different household groups, plus an all-households group (an average household). In contrast, the CPI measures how inflation affects New Zealand as a whole.

The two measures of inflation are typically used for different purposes. A key use of the CPI in New Zealand is monetary policy, while the HLPIs provide insight into the cost of living for different household groups.

HLPIs include interest payments (that includes mortgage, credit cards, and other interest) while the CPI includes the cost of building a new home.

"Interest payments fell 14.3 percent for the average household over the past year, while the cost of building a new home increased 0.8 percent over the same period," prices and deflators spokesperson Nicola Growden said.

"This has contributed to the cost of living, as measured by the HLPI, being lower than the overall inflation rate measured by the CPI."

Mortgage interest payments decrease 15.4 percent for the average household

For the average household, mortgage interest payments decreased 15.4 percent in the 12 months to September 2025.

• Mortgage interest payments were the main contributor to highest-spending households recording the lowest annual inflation. Their annual inflation rate was 0.8 percent, compared with 2.4 percent for all households.

In contrast, the impact of mortgage interest payments was lower for superannuitants.

• Superannuitants annual inflation rate was 3.9 percent. For superannuitants, mortgage interest payments made a smaller contribution to their annual inflation rate. Among superannuitants, 85.7 percent own their homes, and 8.5 percent have a mortgage.

Electricity increases 11.3 percent for the average household

For the average household, the cost of electricity increased 11.3 percent in the 12 months to September 2025.

• The annual increase in electricity costs had more impact on the lowest-spending households, electricity contributed 19 percent to their annual inflation rate of 4.0 percent.
• For beneficiaries, electricity contributed 17 percent to their annual inflation rate of 3.4 percent.

In contrast, the impact of the increase in electricity prices was lower for highest-spending households.

• For highest-spending households, electricity costs contributed 26 percent to their annual inflation rate of 0.8 percent.

Local authority rates increase 8.8 percent for the average household

For the average household, local authority rates increased 8.8 percent in the 12 months to September 2025.

• An annual increase in local authority rates had more impact on superannuitants, rates contributed 18 percent to their annual inflation rate of 3.9 percent.
• For lowest-spending households, rates contributed 18 percent to their annual inflation rate of 4.0 percent.

In contrast, the impact was lower for beneficiaries and Māori households.

• For beneficiaries, rates contributed 5.7 percent to their annual inflation rate of 3.4 percent.
• For Māori households, rates contributed 10 percent to their annual inflation rate of 2.4 percent.

"Superannuitants are more likely to own their own homes and not have a mortgage. Higher prices for rates have more impact on superannuitants than for other household groups," Growden said.

Rent increases 2.6 percent for the average household

For the average household, rent increased 2.6 percent in the 12 months to September 2025.

• The annual rent increase had more impact on beneficiaries, rent contributed 23 percent to their inflation rate of 3.4 percent.
• For Māori households, rent contributed 21 percent to their inflation rate of 2.4 percent.

In contrast, the impact of rent was lower for highest-spending households and superannuitants.

• For highest-spending households, rent contributed 16 percent to their annual inflation rate of 0.8 percent.
• For superannuitants, rent contributed 4.8 percent to their annual inflation rate of 3.9 percent.

Rent makes up 29.5 percent of beneficiary household expenditure. This compares with 13.1 percent for the average household, and 5.1 percent for highest-spending households.