High migration will stoke housing market

migrationMigration to New Zealand hit a 10-year high in September, as fewer Kiwis left for Australia and more new migrants arrived, adding more support for the housing market.

New Zealand saw a net gain of 2700 people in September as more people arrived than left, Statistics New Zealand said.

That was the highest monthly net gain since the middle of 2003 and stronger than economists had expected.

Westpac Bank senior economist Felix Delbruck said the surprise gain was largely due to fewer New Zealanders leaving for Australia, though arrivals of non-New Zealand immigrants continued at above-average levels.

The annual net gain was more than 15,000 for the year to September, which reversed the small net loss in the previous year.

If the recent trends continued annual net migration would easily surpass 20,000 by the end of this year, Delbruck said.

“With unemployment in Australia expected to hit around 6.5 per cent next year, we expect net immigration to rise even further in 2014, which would make this New Zealand’s biggest migration cycle since the early 2000s.”

The numbers of migrants were big enough to “matter for the housing market over the short to medium term”.

Migration was one reason why Westpac expected house prices to keep rising in the year ahead, though at a slower pace, despite the headwinds of Reserve Bank speed limits on low deposit home loans and rising fixed-term mortgage rates.

There was still a net loss to Australia in the month of September, but just 800 more people left for Australia than arrived here from across the Tasman. The net loss to Australia was also the lowest since 2003.

There had been an exodus to Australia, especially after the 2011 Christchurch earthquakes, but net losses to Australia have fallen steadily since late last year.

The Australian economy is slowing down after the massive mining investment boom has turned down, while New Zealand’s economy is picking up with the Christchurch rebuild, a racing property market and a strong dairy sector.

In the September 2013 year, New Zealand had a net gain of 15,200 migrants, compared with a net loss of 3300 in the previous year.

The latest figure is above the average annual net gain of 11,300 migrants over the last 20 years (1993-2012).

In the latest year, New Zealand had a net loss of 25,300 migrants to Australia, compared with 39,500 a year earlier. Net gains were recorded from most other countries, led by the United Kingdom (6000), China (5400), and India (5100).

– © Fairfax NZ NewsStuff. 16 SEPT 2013

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