The link between migration and house prices was a highly emotive political hot potato last year, with endless research reports, opinion pieces and news articles either side of the argument.
The link between migration and house prices was a highly emotive political hot potato last year, with endless research reports, opinion pieces and news articles either side of the argument, such as this one, this one, and this one. The powers that be expected migration to slow-down half way through 2016. As we now know, this didn’t happen. As detailed in our Jan/Feb property market & economic update report, net migration has actually continued to surge away at record highs, with record arrivals combined with relatively low departures. So, it would appear that the grass isn’t always greener!
Even the Trans-Tasman pull isn’t as strong: NZ is currently experiencing a net gain as people either return from Australia or don’t leave in the first place, the appeal of jobs and lifestyles across the ditch perhaps not quite as strong these days. When you think back to previous years, where we were have sometimes experienced a net loss of nearly 40,000 people to Australia this really is a stark contrast. Forget the ‘brain drain’ we now have a ‘lifestyle leap’ with factors such as commute times, and housing affordability coming into play.
Auckland is (and always has been) the main location of choice in this strong net migration situation, but Wellington and Christchurch are also favoured. Interesting fact though! When you look at the percentage changes, Tauranga comes into the mix in a big way, with a 33% increase in Net Gain against last year. And why wouldn’t you? It’s NZ’s 5th largest city, with strong job and economic growth and beaches galore to live the kiwi dream.
So where does this leave us? It’s not rocket science. A strong gain in net migration equals increased housing demand. An increase in housing demand in a time of housing under-supply will undoubtedly push prices up. But it’s really important to remember that it’s not the only thing that does.
Download our Jan/February Property Market & Economic Report for an overview of the main economic factors that influence the housing market, and detail on sales volumes, values, and active buyer types in both the national and main centre housing markets.