News & Research

New Zealand's Q4 CPI figure steady, but still high

CoreLogic NZ's Chief Property Economist Kelvin Davidson shares his thoughts on the latest consumers price index (CPI) inflation figures and what impact they have on the property market outlook.

Stats NZ figures released today [25 January] showed that inflation on the consumers price index (CPI) was unchanged in Q4, remaining at 7.2%. Categories such as food, rent, and building a new house were key contributors to the Q4 inflation figure.

Looking ahead, it’s not totally cut and dried about what this might mean for the near-term interest rate outlook. On one hand, the figure is lower than the Reserve Bank’s previous indication from the last meeting in November 2022 that inflation could have been as high as 7.5% for Q4. But it’s still a worryingly high number, and broadly speaking, above what bank economists had been anticipating.

Indeed, on balance, today’s figures will probably curtail any talk of ‘only’ a 0.5% official cash rate increase on 22 February, and shore up the chances of a 0.75% rise – unless next week’s official labour market figures turn out to be very weak.

Although this wouldn’t tend to change the mortgage rates path too much, given that a 0.75% OCR rise had already been signalled and ‘priced in’ by the financial markets, it certainly won’t help to bring any respite to stretched household finances.

In other words, even if mortgage rates are close to, or at a peak, this doesn’t change the fact that it’s still expensive to be a new borrower and that many existing borrowers are yet to face up to the full extent of the rate increases already seen.

At face value, the latest CPI figures indirectly reinforce the expectation that property values have further to fall yet.


Kelvin Davidson

Meet Kelvin Davidson

Chief Economist


Kelvin joined CoreLogic in March 2018 as Senior Research Analyst, before moving into his current role of Chief Economist. He brings with him a wealth of experience, having spent 15 years working largely in private sector economic consultancies in both New Zealand and the UK.

Full profile

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