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Migration smashes through records

Key housing demand pressure set to continue as the latest Statistics New Zealand data shows that migration flows toppled existing records in January.

Monday, February 27th 2017, 12:30PM

by Miriam Bell

According to Statistics New Zealand, 71,300 migrants arrived in New Zealand in the year to end of January 2017.

This figure was considerably up on the previous annual record set of 70,588 set in December 2016

Further, the seasonally adjusted monthly net gain of migrants jumped up significantly in January to 6,500 migrants.

This was up from 6,010 in December and broke the previous record of 6,300 set in September 2016.

It is the fifth consecutive month where net migration has remained above 6,000.

Westpac senior economist Satish Ranchhod said the monthly migration figure was up on December’s already strong levels, taking the annual net migration inflow to a new record high.

“Gains in migration are due to both increases in the number of new arrivals and more New Zealanders choosing to stay on shore or come back from overseas.

“In both cases, the strength of our labour market and general economic outlook are key influences.”

Westpac expects net migration inflows to remain strong for some time, with New Zealand’s positive economic story, including its labour market, making it a very attractive destination, he said.

“Record levels of net migration are continuing to underpin strong growth in New Zealand’s population, reinforcing the outlook for demand over 2017.”

January’s data showed that the decline in the number of migrants arriving on student visas continued while the number of migrants arriving on work visas increased.

ASB economist Daniel Snowden said that given students are more likely to depart in the next few years than those arriving on work visas, this shift could have a long-term effect on New Zealand.

Those arriving on work visas are more likely to earn, pay tax and spend, he said.

“This could generate a greater contribution to overall economic growth, as well as inflation, compared to that seen when students were a strong driver of net migration.

“But the inflation impacts could be different, clearly a greater boost to labour supply but also a tendency for greater consumption and housing demand.”

However, today’s data clearly indicates that population growth will continue to be a major driver with in the Auckland housing market.

Harcourts CEO Chris Kennedy recently said that migration is particularly key when you look at the Auckland market – given approximately 60% of migrants stay in Auckland.

“That’s about 42,000 people requiring houses. What that translates to is a need for 14,000 houses a year for an average household occupancy of three. That’s on top of an estimated existing shortage of about 20,000 houses.”

But at current levels of construction there are no indications that supply will begin to meet that demand, he said.

Read more:

Fears over building industry capacity 

Supply just one market driver 

« Decline in foreign buyers - LINZDemand for big city property falls »

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Lender Flt 1yr 2yr 3yr
AIA 4.55 2.55 2.69 2.79
ANZ 4.44 3.15 3.25 3.39
ANZ Special - 2.55 2.69 2.79
ASB Bank 4.45 2.55 2.69 2.79
Bluestone 3.49 3.49 3.49 3.49
BNZ - Classic - 2.55 2.69 ▼2.79
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
BNZ - Std, FlyBuys 4.55 ▼3.15 3.29 ▼3.39
BNZ - TotalMoney 4.55 - - -
CFML Loans 5.50 - - -
Lender Flt 1yr 2yr 3yr
China Construction Bank 4.49 4.70 4.80 4.95
China Construction Bank Special - 2.65 2.65 2.80
Credit Union Auckland 5.45 - - -
Credit Union Baywide 5.65 3.95 3.85 -
Credit Union South 5.65 3.95 3.85 -
First Credit Union Special 5.85 3.35 3.85 -
Heartland 3.95 2.89 2.97 3.39
Heartland Bank - Online - - - -
Heretaunga Building Society 4.99 4.35 4.45 -
HSBC Premier 4.49 2.45 2.60 2.65
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - - - -
ICBC 3.69 2.55 2.65 2.79
Kainga Ora 4.43 3.29 3.39 3.85
Kiwibank 3.40 3.30 3.54 3.54
Kiwibank - Offset 3.40 - - -
Kiwibank Special 3.40 2.55 2.79 2.79
Liberty 5.69 - - -
Nelson Building Society 4.95 3.45 3.49 -
Pepper Essential 4.79 - - -
Resimac ▼3.39 3.45 ▼2.99 ▼3.35
SBS Bank 4.54 3.09 3.19 3.49
Lender Flt 1yr 2yr 3yr
SBS Bank Special - 2.59 2.69 2.99
The Co-operative Bank - Owner Occ 4.40 2.55 2.69 2.99
The Co-operative Bank - Standard 4.40 3.05 3.19 3.49
TSB Bank 5.34 3.35 3.49 3.79
TSB Special 4.54 2.55 2.69 2.99
Wairarapa Building Society 4.99 3.65 3.69 -
Westpac 4.59 4.15 4.09 4.49
Westpac - Offset 4.59 - - -
Westpac Special - 2.55 2.69 2.79
Median 4.55 3.12 3.19 3.17

Last updated: 4 August 2020 11:33am

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