ZB

'Diabolical' prices: Inflation leaves working professionals out of pocket

Author
RNZ,
Publish Date
Fri, 28 Jan 2022, 9:13am
Trade Me said today the national median weekly rent climbed $40 last year - reaching $560. (Photo / 123rf)
Trade Me said today the national median weekly rent climbed $40 last year - reaching $560. (Photo / 123rf)

'Diabolical' prices: Inflation leaves working professionals out of pocket

Author
RNZ,
Publish Date
Fri, 28 Jan 2022, 9:13am

By Hamish Cardwell of RNZ 

The new record inflation figures come as no shock to many, with rising housing, fuel and construction costs putting the pinch on even those with means. 

Consumer prices rose 1.4 per cent in the three months to December, taking the annual inflation rate to 5.9 per cent and hitting a three-decade high. 

Auckland resident Jay spent seven months viewing rooms - many in atrocious conditions - trying desperately to find a place he could afford to rent. 

"In that seven months I was looking to be living in my car, that was a very serious option. 

"That is still very much an option even though I'm renting now, because every day, every week I'm wondering whether I'm going to be able to stay here. 

"Constantly I'm stressed and worried about whether the landlord's going to ... put the rent up, whether I can afford it or not." 

The Stats NZ quarterly inflation numbers show some of the strongest pressure is in housing costs. 

Meanwhile, Trade Me said today the national median weekly rent climbed $40 last year - reaching $560. 

Jay is a professional white collar worker in his late 40s, yet he said every day he had to make hard choices just to get by. 

"I'm constantly going 'do I have a shower because can I afford the power?' I don't put on AC because I can't afford it. 

"I'm a working professional, it is not even close enough to be able to feel like I'm able to live comfortably and move forward. 

"I'm barely making ends meet." 

Petrol prices are also through the roof, with many commentators predicting they will hit $3 a litre this year. 

In Hutt Valley, Debz Transport owner Deborah O'Brien said she was already working out how much she needed to put her prices up. 

"We have to on-forward all our costs, to be realistic, otherwise we wouldn't survive, which in the end affects the consumers when they go to the supermarkets. 

"The price of vegetables ... is already diabolical. The other day [at a supermarket] ... a lettuce alone was $6. That is disgusting." 

Another major driver of inflation is increasing construction costs. 

Experts predict that Covid-19 supply chain disruption and increased demand and wages mean the high prices will likely linger. 

Dunedin woman Sian Hannagan wants to renovate the two-bedroom home she shares with her partner and two children. 

She lost two builders due to delays, and despite many tries now cannot get a builder to give her a quote as they cannot predict how much higher prices will climb. 

"The ballpark figures that were thrown around three years ago are almost half of the figures that have been thrown around now. 

"So the longer it goes I feel like the less achievable it will be - at what point do we give up?" 

She is now stuck in limbo, with banks unwilling to lend without knowing how much the project will cost. 

The Reserve Bank has to try to keep inflation between 0 and 2 per cent. 

With it now nearly three times that, the bank is expected to keep hiking the cost of borrowing for some time yet.