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Annual inflation up to 1.9%

Posted on 16 October, 2017

The consumers price index (CPI) had an annual increase of 1.9 per cent, and rose 0.5 per cent from the June 2017 quarter, Stats NZ said today. This comes after 0.0 per cent quarterly, and 1.7 per cent annual, inflation last quarter. Collectively, housing-related costs had the largest upward contribution in the September 2017 quarter, slightly offset by falls in transport prices. However, prices for second-hand motor cars fell 0.9 per cent this quarter but increased 1.8 per cent in the year. Petrol prices fell 1.7 per cent in the September 2017 quarter and increased 4.5 per cent in the year. Vehicle relicensing fees fell 8.0 per cent this quarter and 8.0 per cent in the year. “In the latest quarter petrol prices fell three cents, to an average of $1.83 a litre, despite rising through August and September,” prices senior manager Jason Attewell says. “Average petrol prices in the CPI differ from what you see at the petrol station, because they take into account supermarket and loyalty card discounts.” Housing was behind the increase in inflation. Rents rose 0.6 per cent in the September 2017 quarter and 2.2 per cent in the year. Construction of new dwellings (excluding land) rose 1.1 per cent this quarter and 5.4 per cent in the year to September. Local authority rates rose 3.5 per cent this quarter and 3.7 per cent in the year. While dwelling insurance rose 6.1 per cent this quarter and 12 per cent in the year. Regionally, rents in Canterbury had a 1.9 per cent decrease in the latest year; this is the fifth consecutive annual decrease in rents for the region. The annual increase of 2.6 per cent in construction of new dwellings (excluding land) is the lowest annual increase since September 2010, before the Canterbury earthquakes. Auckland had the lowest annual increases in rent and construction costs since March 2015. In Wellington, construction costs rose 1.4 per cent the September 2017 quarter (3.2 per cent annually), and rents rose 1.0 per cent (3.7 per cent annual). This was the largest annual increase in Wellington rents since December 2008. “Rents and construction costs in Wellington are rising faster than for the rest of the country,” Attewell says. “Annual rents rose by more in Wellington than Auckland, while Christchurch rents fell.”