Statistics New Zealand says annual food prices have dropped for the first time in six years.
Food prices fell 0.3% in the twelve months to June, propelled by lower prices for tomatoes, cheese, and potatoes.
In the 12 months to June 2024, prices for fruit and vegetables fell 16.1% while the prices for meat, poultry, and fish dipped 1.4%
“The decrease for fruit and vegetable prices is the largest recorded since the series began, as prices fell from the record-high level in June 2023,” Stats NZ consumer prices manager James Mitchell said.
All other broad food groups increased in price in the June 2024 year.
The price of restaurant meals and ready-to-eat food jumped 4%, grocery food rose 2.3% and non-alcoholic beverages increased by 4.3%.
In the 12 months to June 2024, the average price of a 1-litre bottle of olive oil in New Zealand has surged by 49.5% to reach $19.99.
Mitchell said that although food prices were lower in June 2024 compared to June 2023, 11 of the past 12 months actually had lower food prices than June 2024.
In the month of June alone, food prices rose 1% compared to May, while on a seasonally adjusted basis the increase was 0.5%.
On an annual basis petrol and diesel prices were both up, with petrol prices increasing 11.6% and diesel prices rising 5.7% from June last year.
However, prices have fallen sharply recently. Compared to May 2024, petrol prices fell 4.6% and diesel prices fell a further 5.7%.
In terms of rental expenses, Stats NZ noted that the ‘flow’ measure of rentals (which is applicable to new tenancies), was up 2.5% annually but had decreased by 1.2% compared to May.
The 4.5% annual rate of growth in the ‘stock’ measure of rentals is down from the 4.6% annual rate last month.
It’s also the first drop in the annual rate since March 2023 when it dropped from 3.9% to 3.8%.
The ‘stock’ measure of existing tenancies rose 0.3% in the month of June compared to May.
Domestic airfares climbed 0.5% on a monthly basis and fell 4.2% on an annual one. It was a similar story for international airfares which rose 4% compared with May and dropped 11.3% compared with June 2023.
Cigarettes and tobacco fell 0.2% on a monthly basis but rose 10.2% annually.
Last year, the SPI took over Stat's NZ's former monthly reports on food prices and rents.
In addition to these monthly indexes, they now release indexes for petrol, diesel, alcohol, tobacco, airfares, and accommodation on a monthly basis.
In May, the lower food price inflation was driven by cheaper prices for fruit, vegetable, meat, poultry, and fish.
Here is the detailed SPI information for June as supplied by Stats NZ:
43 Comments
Now it's all tanking, Longjohndrop is another one who's only just now beginning to understand the economic consequences of cheap debt overindulgence. Yet, besotted with what's in his rear vision, I suspect he believes COVID era interest rates will return tomorrow and set it all on fire once more. Believing it would never end he certainly wasn't around in late 2021 to warn others of the coming consequences.
I'm hearing of jobs being lost everywhere. Hopefully this painful reset is followed by a recovery that's fueled by something along the lines of a sustainable increase in productivity and cheaper money and much less about selling overpriced houses to each other.
Now it's all tanking, Longjohndrop is another one who's only just now beginning to understand the economic consequences of cheap debt overindulgence.
"I may have inaccurately predicted a market fall multiple times over several years, but watch me cast shade elsewhere now it's here".
Classic.
Hopefully this painful reset is followed by a recovery that's fueled by something along the lines of a sustainable increase in productivity and cheaper money and much less about selling overpriced houses to each other.
Probably needs a bit more input than hope.
Weren't you that fella who last April wished everybody here good luck and "I'm going to sit this one out I think"
Yet, here you are?
On the subject of credibility, are you coming or going? Or is, as I strongly suspect, longjohndrop just another one of your handles and you couldn't resist having a little go at a comeback?
I honestly think we're on the cusp of some of the worst economic times since the late 80s/early 90s. Things are already looking just as bad (if not slightly worse) than the GFC on a number of indicators. I think the Government doubling down on austerity in an already dismal economic environment is only going to exacerbate the downturn. The whole economy is interconnected. We're looking at thousands of public servants losing their jobs and the flow on impacts of that will be huge, thousands of other private sector businesses that either are suppliers or retail businesses will be impacted, and not just in Wellington. The DTIs came too late, the horse has bolted. For people that say 'oh well, those people should have known better and they're responsible for over leveraging'. Yes, that's true. But also, the Government should have a role in regulating the system so that we don't end up with such high levels of public debt, that put the whole economic system and country at risk.
We have friends in their mid 30s who married in 2016, and are now at the point in their lives where they want to start a family. As children one of the pair had moved constantly with her parents from rental to rental and did not want the same precarious living arrangements for her own family. They had a 20% deposit saved, and had been waiting for years for house prices to moderate to no avail. In 2021, they bit the bullet (like many others), and borrowed at around 6x their income (which is apparently affording to RBNZ, pfft). Long story short, interest rates jumping up so quickly have basically ruled out having kids for the time being. They are just hanging on with two full-time incomes. Going down to one is unthinkable. This is how New Zealand treats its own young people.
If they're in their "mid-30's" there's no "for the time being". Time is running out. Ovaries wait for no-one.
They would only be down to one income if the woman (sorry, "birthing person") didnt return to work. Make like an American, have the baby, go back to work.
It especially riles me up when people attribute not owning a house to personal failure or lack of effort, or in the example above, haughtily blame those with no other actual choice. If the RBNZ actually did its job, and regulated the system with a view to supporting fiscal stability - they would not have had to pay the stupid prices they did (I consider median price houses to be stupidly high still). If everybody else had their borrowing ability restricted, then there'd no mad rush to compete on ever higher prices. Some people say "oh, but it's a choice and people need to take responsibility. Why should my actions be limited by the government, I should be able to choose what I pay". That's the problem, if enough choose to pay 6x7x8x their income for a house, then their actions have limited your own choices. Now, if you want the security of owning a home and you have don't the luxury of time, you'll have to pay a price that was inflated due to the poor decisions of others. People need to be saved from themselves.
Divorce is increasingly contributing to the drop home ownership rates. Our neighbours separated after 12 years of marriage a couple of months ago, and had to sell their house which had a mortgage on it. I keep in touch with the wife, and both have been unable to buy a house separately on their own (despite both being skilled professionals and well above median income). Both have moved back in with family members to avoid the financial pressures of living alone.
You need to delve a little deeper, there are always reasons your are where you are in life. For example its not possible for a high income couple married for 12 years not to be able to come out of a marriage and buy their own homes so either A. They are not earning what they say they are earning. B. They were not paying down the mortgage at all and just in party mode. C. Their expectations of a "House" is too high.
Can't buy a house, or cant afford a expensive house in the suburb of their choice so they can maintain their affluent lifestyles? I look at the property market every day, there are plenty of older 2 bedroom units on the market in the $300s where I live (and its actually an affluent suburb, probably even cheaper over in the crappy suburbs). People who claim they "cant afford to buy one" are really meaning "they just dont want to live there".
Correct. Probably didn't even own the house in the first place and were paying some astronomical rent in a place they couldn't afford due to a load of wasteful spending in the "Keeping up appearances". Do the math its not possible to come out with at least the deposit for a house each.
She tried to buy an apartment with the equity she got out of the house, but she couldn't get a mortgage. I somewhat understand this, as I was in a similar situation before I met my husband. I had cash, and a job, but banks don't like single people for some reason.
But looking at this, & this morning’s article regarding building costs…that’s deflation right…not disinflation…& that’s in areas of the economy actually affected by what the RBNZ do? They can’t do shit about council rates & insurance…but it’s like they’ve absolutely f*^ked everything else trying 😬😂
There were punters on here not too long ago saying deflation is scarier than inflation when it’s a lessor of two evils thing
The problem arises with the misunderstanding of the terms...or perhaps it may be fairer to say, the wide misuse of the terms to the point they have lost their true meaning.
Inflation is the expansion of the supply of money (money being another misapplied term) and conversely deflation is the reduction of the supply....general prices as poorly measured by the likes of CPI are a symptom.
Deflation is considered less desirable as it is self perpetuating, whereas theoretically inflation can be 'managed'....and inflation provides the wherewithal to pay interest (return)...whereas deflation guarantees defaults.
I'd be pretty surprised by 0.1. Too many big things increasing in the June quarter - rents, fuel, food all higher than March. Very likely to be steep increases in utilities and insurance too, although no hard data on that yet. And the weaker dollar won't have helped with imported stuff. 0.6 feels about right to me.
Falling costs of living are good for consumers. More money in people's pockets which will be very welcome relief after years of spiralling costs.
Correct. But the reality is that NZ is a relatively small market for consumer goods and services; has high costs to serve; and has an unresponsive supply side incapable of driving efficiencies without impacting margins. Therefore, you cannot expect we will become like price competitive markets such as Japan and China.
Food prices pulled down almost solely by the cost of vegetables - thanks in the main to falling input costs in the horticulture sector being passed through to prices. Now, what kept those input costs higher for longer? Any guesses?
That graph doesn't show a strong relationship between input costs and prices at all, they are moving in opposite directions for most of it. Suggests that the shared spike might be a case of a third factor - dare I say demand - simultaneously affecting both sale price and input costs (opportunistic price increases by suppliers when they become aware that the economy can absorb price increases).
Does anyone know why food prices dropped? (particularly fruit and veg). Did we have some particularly good harvest? Or is it a function of businesses decreasing previous profit margins to attract shop-shy potential customers, given the wretched state of the economy? I remember reading somewhere that a lot of post-COVID domestic inflation was driven by profit inflation, wondering if this was some of that correcting out of necessity? Genuinely curious.
Word from friends is that wholesale fruit and vegetables prices have been mostly static or some increased a small amount, apart from tomatoes and some greens and apples which have fallen.
Weather has been fantastic for growing, quality is way up, regular rain with strong sun between, resulting in less waterlogging and pest pressure.
Also exporting has been more difficult in some markets which has lead to more product available domestically
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