Net outflow of migrants could affect mortgage market
Kiwibank is forecasting a significant migrant outflow as New Zealand's borders are reopened in the second half of the year.
Monday, March 28th 2022, 10:00AM
by Eric Frykberg
But this trend could be reversed next year.
These developments could affect the number of mortgages being sought for property sales and could impact the rental market as well.
Kiwibank attributes the changes to young people leaving the country as the pent up desire for the big OE is released when the borders reopen.
On the other side of the ledger, there will be fewer arrivals from three non-visa waiver countries which normally deliver a lot of migrants, China, India and South Africa.
These trends will take place as the Government gradually relaxes border controls over the coming months.
“The phased timing of border reopening is expected to throw the net migration figures around over the next 12-18 months,” Kiwibank economists wrote.
“Long-term departures are forecast to increasingly exceed arrivals over 2022. The assurance that Kiwi moving overseas can return home without the need for MIQ is expected to rekindle the desire for the big OE.
“Annual net migration outflows could reach 20,000 by the end of the year.”
Kiwibank staff said that level of net outflow was last experienced in 2011, when a mining boom in Australia attracted large numbers of New Zealanders seeking six figure salaries.
They said prior to Covid-19, the top three sources of non-NZ arrivals were China, India, and South Africa, which were non-visa waiver states.
Later in the year, the borders would reopen to these people and by next year, the pattern of long term arrivals would lift significantly.
Eventually this will lead to a net gain of around 30,000 people per annum.
That's higher than the long-term average, but well down from pre-Covid highs.
It remains to be seen how this will affect house prices which are already dipping in the wake of an almost unprecedented boom.
The situation could be further affected as the recent rush of new builds come onto the market.
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