Fewer departures boosts net migration to 5 year high (Update 2)

Net permanent and long term migration to New Zealand rose to a five year high in the year to August 2009 as departures from New Zealand continued to drop away over the month. (Update 2 with chart on NZ citizen arrivals from UK and Australia in periods January to August.) Economists are saying the boost in net migration, a shortage of quality housing stock and low building consent levels will drive house prices higher in coming months. Westpac economist Brendan O'Donovan said last week that New Zealand's recovery from recession would be fueled by a migration-led housing construction boom. This goes against the hopes of the Reserve Bank and Treasury, who are wanting any recovery to be export-led without a return to consumers' 'borrow and spend' habits that have seen the country's debts balloon to over 140% of GDP. However some have argued that migrants arriving this time are less cashed up than in 2003 and 2004 when Asian and returning expats had money to spend on houses. There were 15,642 net permanent and long term (PLT) arrivals to New Zealand in the year to August, the highest annual total since the year ended November 2004, Statistics New Zealand said. This was more than triple the same amount in the year to August 2008. Departures over the year were down 9,914 from the year ended August 2008, while arrivals were up by 790.

In the August 2009 month, there were 6,470 net PLT arrivals, down by 863 from a year ago. There were 4,851 PLT departures over the month, down by 2,017 from August 2008. "PLT arrivals of New Zealand citizens numbered 25,400 in the August 2009 year, above the average of 23,400 recorded for the 1979"“2008 December years, but below peaks in the March 1991 year (29,600) and the October 2003 year (27,800)," Stats NZ said. "Arrivals of New Zealand citizens tend to show relatively little variation year-to-year, and the variation that does occur often follows trends in departures of New Zealand citizens a few years earlier," it said. "PLT departures of New Zealand citizens have shown much more annual variation than arrivals of New Zealand citizens. The highest number of departures of New Zealand citizens was 64,300 in the October 1979 year, but by the January 1984 year, this had decreased to a low of 24,400. There were 48,500 PLT departures of New Zealand citizens in the August 2009 year, down 10,600 from the previous year." ASB economist Jane Turner said the pick up in net migration would act to underpin retail spending and housing demand over the next 12 months. "The RBNZ factored in a higher net migration assumption in the September MPS, and today's result is unlikely to surprise," she said.