The rising cost of living and the return of inflation is hitting Kiwis hard. In a new Herald series, Inflation Nation, we explore the reasons and impacts of the price shock - and possible solutions. We also share some great life hacks on how you can save money and live more affordably.
Which of these sectors isn't recording big inflation, blighting our lives: building supplies, house prices or residential rents?
It's the last one: Auckland rents are only increasingly marginally annually, making that the odd sector out of the group.
In fact, the city's rental property inflation is only running at 45 per cent since 2000 and that's the steepest price rise across New Zealand compared to the other two sectors where annual price rises of 20 per cent or more are not uncommon.
But the other two areas are experiencing big inflation, most famously in the runaway housing sector due to a crippling shortage of stock. Rental properties don't appear to be in such short supply, or high demand.
Yet housing inflation is perceived to be good - for homeowners because it makes them wealthier on paper. Not good for those trying to buy a house.
The Commerce Commission started a major investigation into residential building supplies in November after the Productivity Commission said we pay 20 to 30 per cent more than Australia and 28 per cent product price rises are being clocked lately.
The building sector's manufacturing and retail duopoly of Fletcher Building and Carter Holt Harvey is under the spotlight.
In response, the tenor of their submissions was "Us? You've got to be kidding".
Architecture product library firm Eboss said building material prices rose an average 16 per cent in last year's last quarter and are forecast to rise a further 12 per cent in this year's first quarter. It said 87 per cent of suppliers increased prices in last year's second half. Only 13 per cent reported no cost changes and 83 per cent expect further increases in consumer prices during the next six months.
Eboss surveyed 219 suppliers in residential and commercial construction, releasing quarterly construction supply chain updates.
Freight pressures and high demand are blamed: New Zealand is issuing consents for around 49,000 homes annually, an all-time record, Stats NZ says.
Carters, the national retail building supplies merchant owned by Graeme Hart's Rank Group, last year warned of inflation.
Timber, fastening systems, polycarbonate roofing, building wraps, underlay, laminated goods and door hardware products are all listed by the national supplier with price rises.
Bostik product silicone sealants up 27.5 per cent price was one of the highest.
Fastening system business Ecko product prices will be up 9.5-19.5 per cent across their entire range, Carters advised and Thermakraft - suppliers of integrated building wrap systems for passive control of air and moisture in buildings - prices will rise 8.5 per cent but for Ausmesh which will be up 20 per cent.
Marshall Innovations supplies roof underlay, building wrap, construction tapes and flashings and its prices will rise by 10 per cent across their range of products. Ampelite - manufactures corrugated plastic polycarbonate fibreglass skylight tinted clear roofing sheeting - prices will be up 8 per cent. NZ Wood Products plywood prices will rise by 15 per cent, Carters said.
This month, prices at Laminex, which makes and supplies laminated surfaces would rise 4.5 per cent across their range of Strand products, Carters said.
PermaPine timber product prices would rise 5-10 per cent and prices from door hardware business Allegion would rise 10 per cent.
Nelson Pine's GoldenEdge raw medium density fibreboard product prices will rise 6-7 per cent, Carters told customers.
Few sectors show inflation like this. National median house prices rose 20.5 per cent, from $730,300 last January to $880,000 in January this year, the Real Estate Institute says.
Auckland's median was up 20.6 per cent annually, from $995,000 to $1.2m.
But in many other areas, prices rose far faster, illustrating hyper-inflation.
Northland prices rose 29.6 per cent annually from $625,000 to $810,000, Bay of Plenty prices rose 22.8 per cent from $767,000 to $942,000 and Taranaki prices rose 21.2 per cent annually from $520,000 to $630,000.
But sales volumes have dropped lately, fulfilling economic forecasts of lower inflation in the sector. Economists say the housing boom is over and we aren't forecasting to continue to see these sorts of price rises soon.
The REINZ house price index recorded back-to-back monthly falls following an unprecedented run of 18 consecutive price gains. It fell 1 per cent in December and January data showed a further 1.5 per cent fall.
Annual house price growth is now down sharply from a record highs above 30 per cent in the middle of last year.
"The wind is coming out of the market's sails faster than expected," said ASB senior economist Mike Jones.
"A downward trend in the housing market has become cemented," wrote KiwiBank senior economist Jeremy Couchman. "Activity is cooling and house price growth is falling fast."
"The housing market has well and truly turned a corner," said ANZ senior economist Miles Workman.
In early 2000, Auckland's average residential rent was $250/week, according to figures from the Ministry of Business, Innovation and Employment's Tenancy Services. Adjusted for inflation, this comes to $388/week in 2021 dollars.
Today Auckland's average residential rent is $564/week, which represents a 45 per cent increase in real terms - nothing like what's been going on in the house sales sector.
The Herald reported in January that number of residential properties rented is at an all-time high, with bonds taken on more than 380,000 places lodged with the Ministry of Business, Innovation and Employment's Tenancy Services.
In a move welcomed by Associate Housing (Public Housing) Minister Poto Williams, bonds are now lodged on 384,813 residences, up by 15 per cent on the 336,000 bonds lodged at the start of 2015.
Barfoot & Thompson said the average weekly rent for a home in Auckland was $609.89/week in December, finishing last year only 2.89 per cent above December 2020's average of $592.79/week.
Lockdowns, Government-imposed Covid-related rent freezes and changes in demand – such as in the central city, meant many factors were at play in the last couple of years of data, that agency found.
Tightened lending for first home buyers and investors, no tax deductibility for landlords, increases in interest costs and rising inflation are likely to show in the coming months, it forecast.