Statistics NZ reports record high net migration in 2015 year; seasonally adjusted net migration 5,500 in Dec, down from 6,200 in Nov; Net migration from Australia at 800 in 2015; highest since Oct 1991; Tourism up 10% in 2015

By Bernard Hickey

Annual net migration hit a fresh record high in December, thanks to a continued turnaround in migration flows from Australia and a surge of migrants on student and work visas.

Economists said the near tripling of migration since 2013 was contributing to house price and rent inflation in Auckland, where half the migrants say they want to live, but was also adding to labour supply and supressing wage inflation.

A slowdown in economic growth in Australia and a change in Government policy in late 2013 to allow foreign students to work during term time have driven the turnaround. Almost a third of the net migration into Auckland in 2015 came from students from India, which is keeping upward pressure on Auckland CBD rents and downward pressure on service sector wages.

Statistics New Zealand reported net migration rose to a record high 64,930 in calendar 2015, up 27.5% from the previous year and the 17th consecutive month of record high net migration on an annual basis.

Migrant arrivals rose 12% to 121,900 in the year, while migrant departures fell 2% to 57,000. Total immigration from India rose 3,200 for the year to 14,500, while migration from Australia rose 2,000 to 25,300, migration from China rose 1,500 to 11,000 and migration from the Philippines rose 1,500 to 5,400.

However, net migration fell on a seasonally adjusted basis to 5,500 in December from 6,200 in November.

There were 800 net migrants from Australia in the full 2015 year, which was the highest net gain since the October 1991 and the third consecutive month of net gains from Australia. Net actual migration to Australia was 398 in December.

Migration through student visas rose 5,000 to 27,900 through 2015, while migration through work visas rose 4,500 to 37,800 and migration due to movements by New Zealand and Australian citizens were 1,800 to 35,700 for the year.

Student arrivals from India rose 28% during the year to 10,800, while China on 5,300 and the Philippines on 2,100 were the two next largest sources of migration.

“The biggest sources of migrants arriving on work visas in the December 2015 year were the United Kingdom, France, Australia, and Germany. Arrivals on work visas increased 14 percent from the December 2014 year. Arrivals on work visas include working holidaymakers,” Statistics New Zealand said.

Another 14,100 migrants arrived on residence visas. “Most migrants gain New Zealand residence after, rather than before, arrival. Many arrive on temporary visas (eg work, student) and transfer to a residence visa after spending time in New Zealand,” Statistics NZ said.

Net migration to Auckland during the year rose by 7,000 to 30,000. Canterbury was the next most popular region with 6,800, while Waikato was on 2,600, Wellington on 2,400 and Bay of Plenty on 2,100.

Visitor arrivals to New Zealand rose 10% for the year to a record high 3.13 million, including visitor numbers from China rising 34% or 91,000 to 355,900, while arrivals from Australia rose 79,000 to 1.33 million.

Economist reaction

ANZ Chief Economist Cameron Bagrie said the fall in seasonally adjusted net migration in December to 5,500 suggested some moderatiokn, although he noted the three month annualised rate was still 71,300.

He said booming migration typically meant the same for housing and inflation, but this was tempered by low level of departures and by over-supply of housing outside of Auckland.

He noted pressure on rents due to the arrival of more students, but also pointed to the benefits to the supply side of the economy.

“An arrival pool of 122k is huge in terms of the labour market; its 3% of the population!,” Bagrie said.

“Nonetheless there is no stepping aside from stimulus to both demand and supply that 64.9k additional people provide.”



(Updated with more details, chart)