New Zealand household living costs increase

The average New Zealand household living costs increased by 2.4% in the 12 months to the end of September 2025, according to figures released by Stats NZ on 28 October 2025.

New Zealand household living cost situation

This 2.4% increase, measured by the Household Living-costs Price Indexes (HLPIs), follows a 2.6% increase in the 12 months to the June 2025 quarter. The recent peak was 8.2% recorded in the 12 months to the December 2022 quarter.

Meanwhile, inflation – measured by the Consumers Price Index (CPI) – was 3.0% in the 12 months to the September 2025 quarter, following a 2.7% increase in the 12 months to the June 2025 quarter. The most recent CPI peak was 7.3%, recorded in the 12 months to the June 2022 quarter.

HLPIs measure inflation affecting 13 different household groups, plus the all-households group (the average household). In contrast, the CPI measures inflation affecting all of New Zealand.

These two measures of inflation are often used for different purposes. One primary use of the CPI in New Zealand is monetary policy, while HLPIs provide insight into the cost of living for different household groups.

HLPIs include interest payments (including mortgages, credit cards, and other interest) while the CPI includes the cost of building new homes.

“Interest payments fell by 14.3% for the average household over the past year, while the cost of building new homes rose by 0.8% over the same period,” said prices and deflators spokesperson Nicola Growden.

“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

For the average household, mortgage interest payments fell by 15.4% in the 12 months to September 2025.

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

Conversely, the impact of mortgage interest payments is lower for superannuitants.

• The annual inflation rate for superannuitants was 3.9%. For superannuitants, mortgage interest payments contribute less to their annual inflation rate. Among superannuitants, 85.7% own their own home, and 8.5% have a mortgage.

Electricity

For the average household, electricity costs rose by 11.3% in the 12 months to September 2025.

• The annual increase in electricity costs has a greater impact on the lowest-spending households, with electricity contributing 19% to their 4.0% annual inflation rate.
• For benefit recipients, electricity contributed 17% to their 3.4% annual inflation rate.

Conversely, the impact of electricity price increases is lower for the highest-spending households.

• For the highest-spending households, electricity costs contributed 2.6% to their 0.8% annual inflation rate.

Local authority rates

For the average household, local authority rates rose by 8.8% in the 12 months to September 2025.

• The annual increase in local authority rates has a greater impact on superannuitants, with rates contributing 18% to their 3.9% annual inflation rate.
• For the lowest-spending households, rates contributed 18% to their 4.0% annual inflation rate.

Conversely, the impact is lower for benefit recipients and Māori households.

• For benefit recipients, rates contributed 5.7% to their 3.4% annual inflation rate.
• For Māori households, rates contributed 10% to their 2.4% annual inflation rate.

“Superannuitants are more likely to own their own home and have no mortgage. Higher rates have a greater impact on superannuitants than on other household groups,” said Growden.

Rent

For the average household, rent rose by 2.6% in the 12 months to September 2025.

• The annual increase in rent has a greater impact on benefit recipients, with rent contributing 23% to their 3.4% inflation rate.
• For Māori households, rent contributed 21% to their 2.4% inflation rate.

Conversely, the impact of rent is lower for the highest-spending households and superannuitants.

• For the highest-spending households, rent contributed 1.6% to their 0.8% annual inflation rate.
• For superannuitants, rent contributed 4.8% to their 3.9% annual inflation rate.

Rent accounts for 29.5% of benefit recipient household expenditure. This figure compares to 13.1% for the average household, and 5.1% for the highest-spending households.