Unlike NZ, housing inflation is a thorn in the Reserve Bank's side

Unlike in Australia, trimmed mean inflation in New Zealand looks to be behaving, tracking within the Reserve Bank of New Zealand’s target band of 1% to 3%, according to Justin Fabo at Antipodean Macro:

One reason for New Zealand’s lower trimmed mean inflation is that housing inflation – i.e., rents and new dwelling purchases – comprises 21% of the CPI basket and remains well contained:

New Zealand rental inflation, in particular, has fallen sharply and is tracking at its lowest level in more than 20 years:

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About the author

Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.

Unlike NZ, housing inflation is a thorn in the Reserve Bank’s side