Recent figures from Statistics NZ show that we gained approximately 43,800 new migrants (in net terms) in 2019. That’s down from more than 49,000 in 2018, but still a pretty strong result when you compare it to the patterns from 2004 to 2014 – especially around 2011/12, when net migration turned negative! That was a period of so-called ‘brain drain’.
As the chart shows, migrant arrivals have perked up in the past few months, but they’ve been outweighed by departures – in other words, more people are deciding to leave NZ, or more specifically, being forced to exit because their visa (e.g. students) has expired.
There’s currently a lot of conjecture surrounding the migration data, due to a change of methodology from ‘intentions’ (what people said they planned to do in advance on their arrival/departure card) to ‘outcomes’ (what they actually did; only known with hindsight).
And it’s true that the scale of revisions – e.g. the annual net total being changed by 1,000s of people from month to month – can be frustrating for analysts like ourselves. The lack of timely data relating to net migration into each of the regions/TAs is a bug-bear for me too.
However, if we cut through all of that, the key message in terms of the housing market is that net migration (while easing downwards) remains a strong support for demand and values. And that would still be the case for a few years yet even if it continues to fall by 5-6,000 people per year.
Looking ahead to next month (data released 16th March), I’m really pleased to see that Stats NZ will be filling one of the big holes in their new methodology, which was the inability to look at migration of Kiwis to Australia. This Trans-Tasman balance has historically been the swing factor for overall migration flows, so it’ll be massively helpful to be able to look at that again.
So what’s my key take-away? Don’t wait for housing demand and/or affordability to ease because of sharply lower net migration – it just doesn’t look likely to happen.