This as home-loan interest rates jump
Fresh government data has revealed that the wealthiest New Zealanders are facing the biggest jump in inflation once mortgage interest payments are included.
Developed as an alternative to the Consumers Price Index (CPI), the quarterly Household Living-costs Price Indexes (HLPI) include items such as mortgage payments to better reflect the actual level of inflation being faced by different demographic groups.
To define the wealthiest households, Statistics New Zealand uses spending patterns.
According to Statistics New Zealand, the highest-spending households in the country are facing an 8.8% surge in the year through September, compared to the 6.5% inflation experienced by the lowest spending households, Bloomberg reported.
In the third quarter from the previous year, the CPI lifted 7.2% while the HLPI across all households increased 7.7% – the highest on record since the series began in 2008.
Since the wealthiest Kiwis were more likely to own property, they were more impacted by the surge in home-loan interest rates over the past year. Interest payments for the average household were up 39% in the year through September, the statistics agency said.
The nation’s richest had experienced less inflation compared to other groups amid a phase of record-low interest rates and quantitative easing aimed at helping the economy recover from COVID-19.
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It was in mid-2021 that home-loan interest rates started increasing as global inflation pressures emerged and the Reserve Bank began withdrawing monetary stimulus. The central bank has hiked the OCR by 3.25 percentage points in the past year and economists expect further rises in the coming months, Bloomberg reported.
