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On the move; what migration patterns mean for housing stock?

It turns out more Kiwis are leaving New Zealand than ever before, with more than 81,000 departing long term over the year to April.

Overall, a net-loss of 56,500 people was recorded by Stats NZ, exceeding the previous record of 52,000 in the year to March.

On the other side of the coin, migrant arrivals to our shores have also hit record levels.

Sociologist Paul Spoonley says the last year has been “interesting”.

“We've never seen so many migrant arrivals and we've never seen so many departures. The particular concern is the departing New Zealanders, and they make up 98% of those who are going to Australia.”

“The push factors appear to be the New Zealand economy, and what you would get when you compare our wage levels with Australia.”

“They also have what we call a deep labour market. So the level of options in the labour market there completely blows New Zealand’s out of the water. For example, New South Wales alone has a bigger labour market than the whole of New Zealand.”

So with more people leaving, surely that means more houses up for grabs? Spoonley says unfortunately that’s not the case.

“When we talk about the people who are leaving, they’re typically New Zealanders in their twenties. So a normal departure for Australia, in particular, would be a relatively new university graduate, and they're unlikely to be in the housing market.”

With migrant arrivals, Spoonley says many out of China, India and the UK are spending more than average purchasing property, while other temporary migrants are not in the market to buy, they’re in the market to rent.

“The challenge is whether we can build enough houses particularly in Auckland. My other comment would be that our housing types probably don't really meet the needs of the new demography of this country.”

Spoonley says over recent years we’ve also seen a net loss out of our major cities to neighbouring regions too.

“In the case of Auckland, that has gone up from around 11,000 per year to about 14,000 per year as a follow on from COVID and people seeking more affordable housing and remote working.”

“The outskirts of Christchurch are growing really fast, Nelson's growing really fast. Queenstown lakes are also growing really fast, but those are percentage growth rates. If you look at the total number of people, then you get quite a different picture.”


Bayleys Head of Insights, Data and Consulting Chris Farhi says New Zealand’s huge net migration gain has mostly affected the rental market.

“Most of the non-citizens arriving in NZ will be subject to the foreign buyer ban, so they’re not buying immediately, plus people typically rent when they first migrate.”

Farhi says the rental market remains really tight across the country’s main centres.

“Given the net gain in population, we expect that once the market gets through its current elevated supply of listings, we’ll see renewed discussion about housing shortages. This will mainly affect the major cities as new migrants tend to locate there first.”

But with that increased demand, there’s an opportunity for investors to jump on board.

“Once interest rates start coming down, we expect we’ll see a noticeable increase in investor activity, especially given government policies have been aligned to improve investing conditions. These include things like interest deductibility, Residential Tenancy Act changes and changes to the bright-line test.”

However as new migrants begin securing residency, it’s expected that we’ll then see an increase in buying activity from this demographic.

Farhi agrees with Paul Spooney in thinking that some of our housing types don’t necessarily reflect the changing demography of New Zealand too.

“Net migration is mainly from other countries like India, Philippines, and China. Intensive housing is common in these countries, so this could perhaps contribute to more acceptance of intensive housing in the market.”

“That being said, they’ll probably still want some of the ‘traditional’ aspects of Kiwi housing, like backyards, because a lot of migrants like NZ because of what it can offer relative to their home countries.”

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