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The housing market driver that’s not going away

Demand driven pressure on housing is not going to let up as new migration data returns another record high amid suggestions the true figure is being underestimated.

Monday, August 21st 2017, 12:00PM

by Miriam Bell

Statistics New Zealand’s latest data shows that annual net migration reached 72,400 in the year to July, up from 72,300 in June.

Once seasonally adjusted, there was a monthly net gain of 5,800 migrants in July, which is down from June’s inflow of 6,340.

Population statistics senior manager Peter Dolan said the high net migration was mostly driven by non-New Zealand citizens and most currently arrive on short-term work and student visas.

“However, it’s how long they stay in New Zealand, not their visa type, which affects whether they are counted as long-term migrants or short-term visitors.”

All people in New Zealand place demands on the country's services and infrastructure, he said.

“But it is those migrants who are here for a year or more that are included in estimates and projections of the resident population and these are the basis for long-term planning.”

However, economics forecaster Infometrics has released new research suggesting that migration figures might be underestimated by up to 8,000 people per year.

This would mean that net migration could be closer to 80,000 than the latest official measure of 72,400.

Infometrics chief forecaster Gareth Kiernan said the people previously considered to be generally temporary arrivals, like students, workers, and tourists, don’t appear to be as temporary as thought.

“The number of people gaining resident visas from within New Zealand, having previously come here on other visas, has increased 27% since June 2015.”

Migration policy changes announced by the government last October are largely window-dressing and are having a limited effect on arrival numbers, he said.

“But impending changes to minimum salary requirements for skilled migrants could have a significant effect on net migration, making it particularly difficult for employers in provincial areas to source migrant workers.”

Over the next decade, the aim should be for net migration of between 10,500 and 16,600 people per annum, Kiernan added.

“But the economy needs to be gradually weaned off its dependence on migration, rather than abruptly shutting the door on new arrivals.

“This process could take at least seven years given current high migration levels and the tightening labour market.”

In the meantime, New Zealand remains attractive to migrants because of its strong economy and relatively strong labour market.

ASB senior economist Jane Turner said that, for this reason, over the near term, they expect net migration to remain elevated. 

“However, an improving labour market in Australia, if sustained, could potentially slow net migration as it reduces arrivals from Australia and possibly increases departures from New Zealand.”

 

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AIA 4.55 3.19 3.19 3.49
AIA Special - 2.69 2.69 2.99
ANZ 4.44 3.15 3.25 ▼3.39
ANZ Special - ▼2.55 ▼2.69 ▼2.79
ASB Bank 4.45 3.19 3.19 3.49
ASB Bank Special - 2.69 2.69 2.99
Bluestone 4.44 4.44 4.44 4.44
BNZ - Classic - 2.65 2.69 2.99
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
BNZ - Std, FlyBuys 4.55 3.25 3.29 3.59
Lender Flt 1yr 2yr 3yr
BNZ - TotalMoney 4.55 - - -
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 4.75 4.75 -
Credit Union South 5.65 4.75 4.75 -
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 2.60 2.65 2.80
Lender Flt 1yr 2yr 3yr
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 3.99 2.58 2.68 2.79
Kainga Ora 4.43 3.29 3.39 3.85
Kiwibank 3.40 3.40 3.54 4.00
Kiwibank - Capped - - - -
Kiwibank - Offset - - - -
Kiwibank Special 3.40 2.65 2.79 3.25
Liberty 5.69 - - -
Nelson Building Society 4.95 3.45 3.49 -
Pepper Essential 4.79 - - -
Lender Flt 1yr 2yr 3yr
Resimac 3.49 3.45 3.39 3.69
SBS Bank 4.54 3.29 3.19 3.49
SBS Bank Special - 2.79 2.69 2.99
The Co-operative Bank - Owner Occ 4.40 ▼2.69 ▼2.75 ▼2.99
The Co-operative Bank - Standard 4.40 ▼3.19 ▼3.25 ▼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 3.75 3.99 -
Westpac 4.59 4.15 4.09 4.49
Westpac - Offset 4.59 - - -
Westpac Special - ▼2.55 2.69 2.79
Median 4.55 3.19 3.22 3.39

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