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Purchase of housing and rentals in the CPI

In this article we provide an overview of the purchase of housing class and the rentals for housing class of the consumers price index (CPI). These two classes are part of the CPI housing and household utilities group.

The CPI housing and household utilities group also includes the following classes: property maintenance, property rates and related services, and household energy.

Purchase of housing

The CPI purchase of housing index measures the change in price of buying a newly built house excluding the land the house is built on. We survey the price of buying a newly constructed dwelling from builders that build standard-plan houses.

In the CPI we do not track changes in the price of existing (second-hand) houses. This is because the New Zealand CPI uses an ‘acquisition’ framework. This framework is recommended by the International Labour Organization where the main purpose of the CPI is an inflation index for monetary policy purposes.

Under the acquisition framework, spending on newly built houses by owner-occupiers and alterations and additions to existing owner-occupied houses are included. Sales within the household sector of existing owner-occupied houses are excluded because they do not add to the stock of owner-occupied houses.

Since the December 2012 quarter, we have provided a regional breakdown for the purchase of new housing index to help users assess the impact of the Canterbury rebuild on these indexes (see table 1).

Table 1

Purchase of new housing by broad region – December 2013 quarter
Region

Purchase of new housing

Quarterly percentage change

Annual percentage change

New Zealand

1.1

4.7

New Zealand less Canterbury

1.1

3.9

North Island

1.1

3.7

Auckland

1.5

4.4

South Island

1.2

7.7

Canterbury

1.3

9.5

 

See Consumers Price Index December 2013 quarter for this index, which is available in supplementary table 4.01.
See Home ownership in the CPI for more information about the data sources and methods used to compile the purchase of new housing index.

Rentals for housing

The housing rentals component of the CPI includes private and local authority rentals, State rentals, and student accommodation.

The CPI housing rentals index measures changes in the rents of all private, local authority, and State houses – not only those for which new tenants have recently been found.

Since the December 2012 quarter, we have provided a regional breakdown for the rentals for housing index (see table 2).

Table 2

CPI rentals for housing by broad region – December 2013 quarter
Region

Rentals for housing

Quarterly percentage change

Annual percentage change

New Zealand

0.4

2.1

New Zealand less Canterbury

0.3

1.6

North Island

0.4

1.7

Auckland

0.6

2.4

South Island

0.6

3.6

Canterbury

0.7

5.1

 

See Consumers Price Index December 2013 quarter for this index, which is available in supplementary table 4.02.
See Rented dwellings in the CPI for more information about the data sources and methods used to compile the rentals for housing index.

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