Record high migration adds to housing pressure

The latest Statistics New Zealand data shows there was a seasonally adjusted net gain of 5,700 migrants in July 2015.

This smashed the previous record of 5,400 migrant arrivals, which was set in January this year.

Population statistics senior manager Vina Cullum said net migration has been fluctuating around 5,000 since October 2014.

The annual gain in migrants has been setting new records for the last 12 months, she said.

Unadjusted figures show there has been a record net gain of 59,600 migrants in the July 2015 year.

This was driven by both more arrivals, which are up 14% on the July 2014 year, and fewer departures, which are down 6% on the July 2014 year.

While all the regions had a net gain of international migrants in the July 2015 year, half of all migrants who stated an address on arrival were moving to the Auckland region.

Some commentators were surprised by the record-setting migrant figure, given the country’s changing economic situation.

Westpac senior economist Felix Delbruck said migration was much stronger than expected in July – although he was cautious about reading too much into it.

“Even allowing for some statistical volatility in the student category, there is clearly no sign yet that migration is slowing.”

Migrants respond to economic incentives so the deteriorating economic outlook and softening labour market should result in slower net immigration and population growth eventually.

But, in the meantime, rapid population growth is adding to demand for housing and related construction activity, particularly in Auckland, Delbruck said.

“The combination of weaker economic growth and continued strong population growth is one reason why we believe the Reserve Bank will have to provide significant further interest rate support to meet its inflation target.”