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Baby blues: The cost of raising a family rises in New Zealand

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by Hayley Munro-Smith
Feb 20 2019

Baby blues: The cost of raising a family in 2019 rises by 62%, IBISWorld reveals

According to industry research company IBISWorld, the cost of raising a baby has soared by over 62% over the past five years as child care, footwear and clothing expenses have all increased.

Child care takes the cake as the biggest cost for raising a baby, with the child care industry’s revenue having almost doubled over the past five years from $582.6 million to $1.1 billion in the 2018-19 financial year.

New Zealand parents are expected to spend an average of over $5,028.90 per baby on child care, clothing and footwear in 2018-2019, up from $3,034.53 in 2013-14.

“This will come as no surprise to parents and guardians around New Zealand, many of whom are working longer hours to support their families,” said IBISWorld Senior Industry Analyst, Hayley Munro-Smith.


Top Three Baby Expenses Breakdown

Product or Service

Revenue 2013-14 ($ million)

Revenue 2018-19 ($ million)

Change (%)

Child care

















Child Care Driving Costs For Parents

According to IBISWorld, child care has historically been the biggest expense for New Zealand parents and has also seen the greatest growth in this segment over the past five years.

In recent years, New Zealand parents are more likely to work than stay at home with their children and are often working longer hours, which is driving increased demand for child care services.

“Ongoing Early Childhood Education funding and growth in household incomes has permitted parents and guardians to make greater use of child care facilities, which in turn has driven strong growth in fees for services,” said Ms Munro-Smith.

Higher government funding and enrolment rates have also propelled demand for child care, with the industry expected to reap $1.1 billion in revenue in the 2018-19 financial year, compared with $582.6 million five years ago.


Trends In Baby Fashion

With many designers now catering towards children’s clothing, fashionable, high-priced children’s shoes and clothes have swept the market, increasing costs for parents and guardians.

“New Zealand parents have also sought out higher-quality, more durable footwear for their children in recent years, demonstrating a willingness to invest more in children’s shoes if they believe them to be particularly durable,” said Ms Munro-Smith.

The cost of children’s clothing has also expanded but stronger competition has constrained pricing growth and expenditure in this segment, to the relief of many parents.

“This competition has principally been generated by online stores, which can offer lower prices than bricks and mortar stores due to their lower overheads and expenses. Discount department stores have also expanded by offering significant ranges of affordable clothing options, providing families with an opportunity to buy fashionable children’s wear at lower prices,” said Ms Munro-Smith.


Other Trends And Expenses

Children’s toys have also climbed as a cost for new parents. However, imported, low-cost toys have prevented any significant increase in overall expenditure on these items.

New Zealand parents are also increasingly embracing environmental sustainability in their baby items, with reusable and biodegradable nappies, baby wipes and other sanitary products growing in popularity over the past five years. Environmentally sustainable sanitary products are also often priced at a discount, further boosting demand for these products.  

“Sanitary products overall have fallen as a proportion of baby expenses, as prices for these items have risen at a far slower rate than other categories, such as car seats, strollers and child care,” said Ms Munro-Smith.  

The cost of health insurance has also risen as a portion of expenses incurred by parents and guardians.

“Many parents opt to take out private health insurance or expand their policy when planning for a family to ensure that their children receive coverage, and this increases their insurance costs. Private health care insurance premiums have risen across the board over the past five years, which has contributed to growth in the cost of raising a baby in New Zealand,” said Ms Munro-Smith.


IBISWorld Industry Reports used in this release:

Child Care Services in New Zealand

Clothing Retailing in New Zealand

Footwear Retailing in New Zealand


For more information, to obtain industry reports, or to speak with an analyst, please contact:

Kim Do

Strategic Media Advisor – IBISWorld Pty Ltd
Tel: (03) 9906 3641 Mobile: 0422 773 995