Migration steady, but slowing

In the latest Statistics New Zealand data there was a seasonally adjusted monthly net gain of 5,500 migrants in April 2016.

This was up on March’s net gain of 5,300, but was down on the average number of migrants per month over the last six months.

Statistics New Zealand population statistics manager Jo-Anne Skinner said that, since exceeding 6,000 in October 2015, the seasonally adjusted net gain in migrants has averaged 5,800 per month.

“However, the trend series of net migration, which adjusts for both seasonal and irregular effects, shows that the monthly net gain in migrants is slowing.”

Despite this, the annual net gain of migrants remained at a record-setting high.

There was an unadjusted net gain of 68,100 migrants in the April 2016 year, as compared to 67,600 in the year to March 2016.

Migrant arrivals drove the new high, with 124,700 migrants arriving in the April 2016 year. Returning New Zealand citizens made up a quarter of these.

While annual net gains in migration from Australia continued, there was a small seasonally adjusted net loss of Aussie migrants in April 2016 for the first time in 12 months.

A number of commentators believe the data indicates New Zealand’s migration boom may have started to slow.

Westpac chief economist Dominick Stephens said net migration appears to have peaked.

“Monthly figures rose aggressively for years, but levelled out at around 6,000 from October last year to February this year. The past two months have been significantly lower than 6,000.”

In his view, there are two drivers for the turn in migration.

One is that, after falling to very low levels, the number of New Zealanders departing for Australia has stabilised in recent months.

The other is that the number of foreigners arriving on student visas has fallen sharply, possibly due to recently imposed tighter English language requirements.

“We expect net migration to fall over the years ahead as the improving Australian labour market entices more Kiwis across the Tasman, and as the surge of students who arrived in recent years on temporary visas begin to depart the country.”

Stephen’s comments lend support to a recent HSBC report which suggested that migration, while still strong, has passed its peak.

HSBC chief economist Paul Bloxham said that Australia's improving labour market could mean New Zealand's migration boom may be nearing is peak.

“Our modelling, which looks at labour market conditions across the Tasman to forecast trans-Tasman migration, suggests we may have passed the peak in inward migration to New Zealand.

“This may, in turn, start to support a modest lift in wages growth, which would help New Zealand to deal with its low inflation challenge.”

Both a lift in incomes and a decline in arrivals could, potentially, help to alleviate some of the pressure in New Zealand’s housing market.