Record migration means continued pressure on Auckland market

Migration shows no signs of abating with another record new inflow over the last month - and over half of the new arrivals plan to live in Auckland.

Thursday, April 23rd 2015, 3:08PM

by Miriam Bell

According to the latest migration data from Statistics New Zealand, there was a record seasonally adjusted net inflow of 5,000 migrants in March.

This was up on February’s seasonally adjusted net inflow figure of 3,500 migrants and January’s figure of 3,100 migrants.

In the March 2015 year, there was a record-high of 56,300 migrants, which was up from 31,900 in the March 2014 year, and 2,500 in the March 2013 year.

While migrant arrivals were up 16% from the March 2014 year, departures were down 13%.

Just over half (51%) of all migrants who stated an address on their arrival card planned to move to the Auckland region.

Given Auckland’s existing supply issues, this influx of new arrivals looking for somewhere to live is only likely to exacerbate the pressures on the supercity’s housing and rental markets.

Westpac senior economist Felix Delbruck agrees.

He says the trend in net immigration appears to have finally stabilised - albeit at a very high level.

“The flow of New Zealanders to Australia is hovering at multi-decade lows and arrivals of foreign migrants are only a touch below their recent historic peaks.”

There was nothing in the data which would change his view that annual net immigration will approach 60,000 later this year.

Delbruck says the weak Australian economy is keeping New Zealanders at home, while the country’s construction-fuelled economic upturn is drawing in historically large numbers of foreign workers.

“These supportive factors won't last forever, but they are unlikely to weaken seriously any time soon… We expect population growth to remain high into 2016.”

He says that, while this is good news in terms of economic growth and labour market pressures, it also means that Auckland's housing squeeze is likely to get worse before it gets better.

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