By David Hargreaves
The debate that has sprung up in the last day or so about whether New Zealand's immigration boom has 'peaked' rather misses the point.
For the record, if one scrutinises the monthly seasonally-adjusted migration figures from Statistics New Zealand, it can be seen that the 5500 net immigrant arrivals in recent months gives an annualised inflow of 66,000. That's down from an annualised figure of somewhere between 72,000 and 74,000 based on the prevailing monthly averages of in excess of 6000 net arrivals between September 2015 and February this year.
So, yes, I think the boom has definitely 'peaked'. But does this mean that we're now going to see a massive reversal to a net loss of migrants as has tended to happen following past immigration booms?
I don't think so, because I think the depth of this current Government's contrivance and cynicism in pumping up the economy and GDP figures through particularly student workers is being misread. The immigration boom didn't just happen - it was cultivated by government policy changes.
So, unless this Government is forced by public opinion to back away from its current immigrant-encouraging policies the number of arrivals is unlikely to fall materially.
I had seen anecdotal suggestions that the number of inbound students was falling after a clampdown on the english language requirements. But, contrary to this, in May there were 1265 student arrivals, which was up 10.9% on the numbers arriving in the same month last year.
Also in May there were 2558 arrivals on work visas, which was up 4.5% on the same month a year ago.
So, not too much sign of easing in these key areas of inbound migration.
The big likely swing factor of course is in the numbers of people leaving. Last year there were 57,000 long term departures from these shores compared with a peak exodus of 86,400 in 2012.
Okay. If we decided that this kind of surge in departures is going to happen again - and I'm not convinced it is - then this would lop 30,000 off the net annual arrival figures.
Last year there were 65,000 net immigrant arrivals. If we assumed another surge of Kiwi departures and what the heck, let's say this moves to a new record of in excess of 90,000, this would still leave a net flow of inbound immigrants of around 30,000, assuming the numbers coming in did not drop - and it's not in this Government's interest for them to drop.
An annual inflow of 30,000 immigrants would represent a growth in New Zealand's population of something over 0.6%. As some means of comparison. Britain's current net immigrant inflow is at record highs of 330,000, which is around 0.5% of Britain's population - and they are screaming about it over there.
So, whether New Zealand's immigration boom has 'peaked' or not is largely irrelevant. We have historically high net numbers of immigrants and that's not likely to change.
The big bone of contention of course, is where the migrants settle - and are housed.
The Stats NZ figures for the year to May show that of the net 68,400 immigrant arrivals, 31,600 gave Auckland as their final destination. This is misleading though, because some 15,600 people didn't give a final settling destination. This means the 31,600 Auckland settlers are among the 52,800 net new arrivals who stated where they were settling. That's just under 60% of the total. If we apply the same percentages to the 15,600 that didn't give a destination, this gives a figure of over 9300. Add that figure to the total of people who definitively said they were settling in Auckland and you get a grand total of just under 41,000 net new arrivals in New Zealand's largest city in the past 12 months.
As of about a year ago, Stats NZ estimated Auckland's population at 1.454 million. Add 41,000 to that and it's a 2.8% increase, just from migration. Stats NZ figures suggest that annual births in Auckland are running at around 22,000 and deaths at around 8000. So, that's a natural growth in population of circa 14,000. Add that to the migration and it's an increase of 55,000 - or 3.8%.
Based on Auckland's current ratio of three occupants to a house, a population increase of 55,000 requires an extra 18,000 houses. By common assent Auckland has a current housing shortage. These population increase figures would suggest that if you added another 18,000 houses in Auckland in the next year, the current shortage would not be any worse. It wouldn't be improved. But it wouldn't be any worse.
So, how are they doing on that score?
Housing Minister Nick Smith has certainly been huffing and puffing. And just this week he was lauding the fact that building activity in Auckland has topped an all-time high of $6 billion per year on the back of the Auckland Housing Accord, the process through which developments are being fast-tracked.
Impressive dollars. But what about housing numbers?
The Ministry of Business, Innovation and Employment commissions an annual National Construction Pipeline Report. The next one is due out in either July or August. Last year's one, which came out in July 2015 contained the graph below portraying the expected residential construction numbers for Auckland.
In commenting on that report at the time, Smith said the report indicated "the strongest sustained level of growth in the building and construction industry in 40 years".
"I am particularly encouraged by this report’s projections that 80,000 new homes will be built in Auckland for the forecast period of six years to the end of 2020, Smith said then, adding that the number of dwellings constructed in Auckland was forecast to increase "from 10,500 in 2015 to around 14,000 between 2016 and 2020". Sounds good till you place it against a potential requirement of 18,000 houses in a year simply for Auckland to stand still in the face of its current shortage.
But, okay, how are actual levels of residential construction activity in Auckland bearing up against those forecasts?
Smith's latest Housing Accord update contained the below graph:
The Stats NZ figures for the 2015 calendar year showed Auckland had consents issued for 9251 new dwellings in the 12 months. That's short of Smith's 10,500, but does compare reasonably favourably with the 7632 that had been consented in 2014 for Auckland.
But how has this upward momentum continued into 2016, bearing in mind the forecasts of around 14,000 new dwellings for Auckland this year? Well, stalled is the word.
The Stats NZ figures show that for the 12 months to April 2016, Auckland had consents for 9353 new dwellings. So, that's barely changed from the position at the end of last year.
If we look at the consents issued for the first four months of this year, the total is 2780, which is up just 3.8% on the 2678 for the same period a year ago. Now, the argument might be that the first four months of the year are a fairly slow period - but of course they are slow every year.
The fact is the comparisons going back a few years are not good. In the first four months of 2012 there were 1416 consents, which was up 27.5% on the figure for the same period a year earlier. Over the first four months of 2013 there were 1669 consents - a rise of 17.9%. In 2014 there were 2155, which was an increase of 29.1%. And then last year in the first four months there were the previously mentioned 2678 consents, which was an increase of 24.3%.
So, right now, and bearing in mind the forecasts of another big increase in consents this year, right now the figures have flatlined. Whether this represents a case of temporary capacity indigestion, which is going to be followed by another upsurge of consents, time will tell. But just at the moment things look a little ominous.
Looks like the Government needs to produce an epic magic trick to get anything like those 18,000 new houses needed in Auckland this year. Or it could instead do something about the levels of immigration. Which course of action do we think looks logistically easier at this point?
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Looks like the Government needs to produce an epic magic trick to get anything like those 18,000 new houses needed in Auckland this year.
Not really, they just need to find a way to convince Auckland Council to open up enough land to cater to growth. Currently Auckland Council restricts Auckland to half the minimum land needed to grow and this makes it too expensive to develop most housing or apartments in Auckland. This will of course take more than a year. But get rid of this constraint and apartment construction rates will soar.
Or it could instead do something about the levels of immigration. Which course of action do we think looks logistically easier at this point?
Our levels of construction are so retarded and slow (apartment build rates in Auckland are running less than 3rd as fast as a typical city), that the "something" required would be very drastic. Can we feasibly cut back immigration enough to mitigate for the growth restricting policies of Auckland Council?
Where is the benefit of building more houses when there are thousands of dwellings empty in Auckland now.
I live in Sunnynook. My nice Japenese neighbour sold up 3 months ago to move back to Hiroshima to care for her elderly mother. The house was sold to a Chinese "student". I met him and his elderly parents. The house remains empty, but every week someone comes and swaps the late model Audi on the driveway late in the evening for a late model Renault and the following week the cars swap over again. My partner cuts their grass without being asked so our shared driveway doesn't look too untidy (we are paid up members of a faux community ). Walking to the next intersection 250m away there are 3 other "empty" houses like this. Every street around here is the same.
I'm not sure about the true figures of empty houses (seems none around me) but it would be quite a large loss to an owner to keep a rentable house empty for too many months. Perhaps they have plans that will take shape in less than a year and don't feel they can rent it out for so short a time period.
Yet I guess, at least for a landlord, it is good that they keep them empty. We don't live in a society where you can just go and requisition people's possessions just because they are not using them. The situation is not as dire as most commenters on this site make out.
Because we are 10s of thousands short on supply.
If you own property when a correction to property boom occurs and your town is 10s of thousands of buildings short of supply, then you have a problem. Your town lacks ability to attract businesses, because it has low property availability.
Comparatively all of the regional competing cities are building much faster than Auckland, so will offer much better environments for business post correction.
Its not just opening up land, its having someone to build on the land. Im sure we could import "builders" from elsewhere and pay them 7.50 an hour (on contract) to prop up our miserable failure of an apprenticeship scheme that successive governments have driven into the ground.
..Aucks is a mess and the mess is being exported to the rergions. Thats the plan and this govt is convinced that more mouths to feed is the key to improving the country we have/had. Its idelogical and they will use any data or stats to support vision of their paradise.
The Half Gallon Quarter Acre Pavlova Paradise
Austin Mitchell revisits Auckland in 2002
https://www.nzonscreen.com/title/pavlova-paradise-revisited-2013/series
Watch episode 3 - and ask yourself has anything changed
Watch and listen to the issues around traffic and grid-lock in 2002
And what John Banks was going to do about it
https://www.nzonscreen.com/title/pavlova-paradise-revisited-episode-thr…
The Half-gallon of beer - anyone remember those?
Quarter Acre Sections - they doing those anymore?
Pavlovian Pavlova - drool
A few heads at Minister level need knocking together and the only way seems to be through the Nat polling.
Regrettably there seems to be either a reluctance on Joe and Jill Public to realise the enormity of what this immigration bubble has brought us or is it a collective dumbing down of the nation's IQ?
It is time to give a wider publicity to people like Michael Reddell (Croaking Cassandra) who do real quality analysis. I sent his name to Jim Mora on RNZ National who was on to him the following day.
It really is a pity that the the average Joe seems to be attracted to such brainboxes as Hosking, Henry, Smith and Williams and their soundbites.
I listen to Hosking on the radio because his program has interesting people and content on it. Hosking himself is totally out of touch with the average New Zealander and thats the problem. Cannot stand him on Seven Sharp, simply have to change channels.
National will win another election, why ? because you simply couldn't put an even worse bunch of idiots into power. Plenty of people happy with the status quo, they don't want to risk change.
Unfortunately, DH, the history of Gubmints and immigration is long and inglorious. Essentially, and as was certainly the case in Britain in the 60's, recent immigrants tend to not bite the hand wot induced them here, so Vote Incumbent. And as the core impulse for politicians of all stripes at local, regional and national levels, is 'Get Re-elected', getting more compliant souls into their capacious election hopper, is the Path to Re-election.
Not sure just how this dynamic can be short-circuited.....
Short circuited you say...
Lets measure policy proposal, delivery and programme success against what we all understand as written. Verse 2, 3 and 4 all seem of immediate policy relevance.
God of Nations! at Thy feet,
In the bonds of love we meet,
Hear our voices we entreat,
God defend our free land.
Guard Pacific's triple star
From the shafts of strife and war,
Make her praises heard afar,
God defend New Zealand.
Men of every creed and race,
Gather here before Thy face,
Asking Thee to bless this place,
God defend our free land
From dissension, envy, hate,
And corruption guard our State.
Make our country good and great,
God defend New Zealand.
Peace, not war, shall be our boast,
But, should foes assail our coast,
Make us then a mighty host,
God defend our free land
Lord of battles, in Thy might,
Put our enemies to flight,
Let our cause be just and right,
God defend New Zealand.
Let our love for thee increase,
May thy blessings never cease,
Give us plenty, give us peace,
God defend our free land.
From dishonour and from shame,
Guard our country's spotless name,
Crown her with immortal fame,
God defend New Zealand.
May our mountains ever be
Freedom's ramparts on the sea,
Make us faithful unto Thee,
God defend our free land.
Guide her in the nations' van,
Preaching love and truth to man,
Working out Thy glorious plan,
God defend New Zealand
nice interactive chart released today says it all, took out the returning kiwis so governemnt can not BS there way around what they are doing
http://insights.nzherald.co.nz/article/rising-migration-numbers-nz
These unresolved pressures can only result in some sort of explosion. There is nothing happening that looks like it will help in the foreseeable future either. Halting immigration is the only thing that would have any timely effect.
If it were a natural disaster producing this level of homelessness we would be far more active at solving the shortfall. It is an indictment on all the religious organisations that the Maori Marae are the only ones opening their doors. How many church halls sit empty each night. Again if it were a natural disaster I am sure they would be used, but because it is a silent creeping disaster many turn and look the other way.
As I have said before, Those with families sleeping in cars should park each night outside John Keys mansion at, I think, 107 St Stephens drive, Parnell and embarrass him as he should be.
The squeeze is on him. Immigration/pressure on housing leading to a very strong building industry is a major part of keeping this economy and GDP ticking along. As with any society its jobs that are the most important - change the status quo with housing and the prop that is holding National up collapses. That is why he has to make like he is doing something about housing issues yet change nothing.
You don't think Smithy was placed in the Housing portfolio because they thought he would be effective do you?
Governments need to be elected for longer periods so that they are not always focused on getting elected and could take the longer view. An example here is toll roads in AKL. If we were a beneficial dictatorship like Singapore we would have had them a decade ago and we would all be happy about it (or in jail)
I could live with a 5 year term of government .
I'm not sure the squeeze is on Key. ...he seems to welcome rising prices in every interview I've seen him. He denies prices are inflated, denies chinese have anything to do with it.
I have bought a house 10 years back, last year it increased in value 25%. I don't like it though, I have 3 children who will never own a house if prices keep escalating like this.
it will be up to you now to use the equity in your home to help fund your children, that is the sad state we are heading towards where before if you worked hard and did ok you could get on by yourself without the help of family
as for chinese Friend was taking to me today about sponsoring to bring in parents as residents as she is now allowed to but falls below the 65K threshould (as paid a NZ wage)
it was amazing to listen to the schemes and the first thought was how do i get around this, reminded me of this
"There is a phrase in China that is called '上有政策，下有对策' which when you translate it is saying 'when the Government has a policy we have a way around it'."
http://www.newshub.co.nz/nznews/lawyer-chinese-house-buyers-will-get-ar…
This is a quite interesting development. I suggested some time back that people will have to do this to stay competitive but it occurs to me now this is one of those "societal changes". Chinese folk have been doing this for eons and now, to compete with them, we have to start doing it. A bit like how when I walked up Queen St today I had to keep right instead of left to make steady progress.
We should ensure that we also develop the same sense of filial piety in our kids - good luck with that!
Anyone recall that Insurance advert where young children are asked by their parents to support them financially in their old age and the kids look horrified and run away? Funny it hasn't turned out that way at all.
I know Chinese and Indian families spending fortunes on private education, tutoring and funding getting degrees in overseas universities for their kids - literally hundreds of thousands of dollars.
Yet the people I know doing this are fairly ordinary, long time residents/citizens with professional jobs and multiple properties. I believe many houses have been bought locally by people who arrived here in the last twenty years although recently there has been a trend for more foreign buyers and that has pushed up prices in the last couple of years. I think what happened is that immigrants observed that house prices doubled in Auckland every seven years so naturally got in on the action. My house doubled in price from 1992 to 1997 and no one complained back then. Word of this spread back home causing a bonanza in the premium Anglophone cities.
Imagine it, the whole thing would be hi-jacked and painted as xenophobia. But it IS the referendum and important discussion we should of had instead of a stupid flag.
We simply do not have the infrastructure + homes for so many people or jobs or the productive capacity without it harming the country as a whole environmentally and socially. It's already done damage
It must be stopped now. Right now.
How though? Way too many vested interests. House flippers are on a roll, and have many industries dependant on them.
Immigration advisors fees,media advertising income from all the ads selling the country off.
They all take their cut, want a free ride.
Then they complain, point the finger of xenephobia to any one who objects.
When National was elected with John Key at the helm the govmnt debt was 10 billion.
9 years later it is 111 billion.
Auckland has been flooded with immigrants and now needs billions on billions of $ spent on infrastructure.
The Auckland locals are accepting that their motorway network is now going to be tolled as if that will magically get rid of the extra cars.
Creating jobs by building houses is not beneficial productivity. Farming forestry and fishing is real productivity.
Wake up New Zealand. Capital value growth, on your house is not wealth. Letting wealthy immigrants displace NZ'ers from housing is not prosperity. Having to build infrastructure for the rampant population growth is not productivity.
The more people that live in a country the more diluted the wealth.
The only quick way to help the housing crisis is to slow down immigration.
There are 30,000 people born here more than die every year and 68,100 migrants. That is 100,000 a year. One million extra people in ten years increase. Probably requiring 50,000 new houses a year.
They need schools, hospital beds, health care, roads that are already overrun in Auckland and Wellington and becoming that way elsewhere.
The homelessness that has been getting attention in the news will increase to tens of thousands of homeless unless immigration is controlled.
That is the only possible quick fix for the housing bubble and the housing crisis. Slow down immigration till our infra structure catches up.
Fail to do this and the housing crisis will become the housing disaster with people smashing into houses in desperation. The have not's will eventually be out of control.
Its not bank money that is causing the problem, its money coming in from China. The government has its head in the sand, but is fooling no-one. The banks are miffed because they don't get to clip the ticket. Do you really think for one minute that Kiwis woke up one morning and all decided to mortgage themselves to the hilt to buy houses for 500k more than they are worth?
that 50K limit has been there for years the crackdown was only recent, but as they say
There is a phrase in China that is called '上有政策，下有对策' which when you translate it is saying 'when the Government has a policy we have a way around it'."
and i have had it explained to me how its done, really quite simple
NZ should encourage Boris Johnson to live here. Make him PM. Although he is probably too busy at the moment, trying to sort his own country out.
http://www.telegraph.co.uk/news/2016/06/23/exclusive-boris-johnson-inte…
Boris is no twit, an Oxford/Eton background, controversial, funny, clever, a little unusual for a conservative most are drab, someone who would add to the politics in this country if he was here. His personal life is chaotic which adds the the interest, a unique individual.
I'd love to see a breakdown of votes by gender when it is all over. Much like the recent election of the President of Austria I think we will find that the genders vote quite differently. That's why I wrote "free men of Britain".
If it's the choice of Switzerland (only a lunatic would join the EU)why not Britain? It's not a crazy idea.
Plenty of empty homes in Epsom. When they are bought with dodgy money secreted out of China, it is simply laundering. When those properties go up 100k or more per year in capital gains who wants messy tenants and the associated hassles to get another 30k? If you want to see how much this Chinese money can devastate a city Google Vancouver, so many empty homes, falling into ruin, yet their value increases yearly.
And that makes it right how??? Why cant we be better than this - why do we also have to sell our citizens out - the answer is we don't have to.
It seems a large percentage of our population is of the "well everyone else is doing it" type moral standards - now apply that to every other part of life - you'd have chaos.
Lets just screw everyone for a buck...
WP has said for years that importing people from other countries also means importing there cultures and attitudes.
the problem is if you have mass immigration then you get those not being watered down to fit it but onstead carried on as if they are still where they came from.
talk to many immigrants that came here 20 years ago from the same countries and they are just as dismayed with the way things are allowed to happen and being done
Now you beginning to understand human nature, sorry but its been every man for himself for years now. people don't give a s*@t about one another as long as they are all right jack. You see it at work you see it in the property market you see it everywhere. Even if thats not your nature you end up having to harden up before they take everything from you and screw you over.
The only way it can not be like that is if everyone lives in a small community and share a sort of group consciousness or a set of unwritten laws. We are now competing with many different communities and are going to have to up our game. Gone are the old ways of doing things when we kicked the kids out when they turned 18 and made them fend for themselves. This is evolution 101, survival of the fittest.
"Survival of the fittest" that thing that civilized people have been trying to get around since forever. If we are to go back to that I suppose the first thing we need to get rid of all doctors and medicine. Yeah/nah? Well, we either be civilized or we don't. I vote for civilized
yes i used to lend tools etc to neighbours, not anymore. in the old days was fine they would return them once used normally with a thank you or some beers and visa versa if i borrowed. now you never get them back they seem to think Borrow means they now own and you have to go ask (demand) for it back after a period.
so its now a case of sorry buy or rent your own.
Took me awhile to come to that attitude though i guess i was reinforcing the naive kiwi culture
It will be interesting to see what Auckland is like in 20 years.
Businesses will move out as lease costs become more ridiculous, and the workers they need cant afford to live there.
The workers will move out leaving the periphery of Auckland empty
The remainder will build a large dome like structure to protect themselves and their interests from the marauding hoards of paupers
Logans Run anyone ?
Yep the richer you are the closer you will be able to remain to work. The workers will have to travel for miles or how about those worker compounds where the factories work 24/7 and as one shift worker hops out of bed you can get into that nice pre warmed bed ? Wow future generations have so much to look forward to !
Scaremongering. Bubble deflation is often triggered by insignificant events. All it would take are relatively minor policy teaks and the increasing supply trend to continue (notwithstanding the current two months flatlining in consents that Hargreaves interprets as an ‘ominous stalling') or a reversal of NZs economic fortunes relative to OZ, and it is over. One or more of those things has to happen soon. Govt must be under real pressure to do more as their polls show them middle NZ is now seriously worried about the next generations housing grief.
Two years ago a BBC Panorama programme showed how a high street business in the UK could guarantee entry to study into the UK. No problems to get a false TOEFL qualification. You want an Indian bank account in your name or a UK account showing that you have sufficient funds? No worries, but the Bank of Scotland one costs a bit more. Offer of a tertiary place... No problem. We have colleagues who can provide that, and don't worry, there's no need for you to actually attend the classes. I expect you'll be too busy working and wont have time to actually study.
This was in the UK. It seems that the NZ Immigration deliberately have their heads in the sand if they claim that they are surprised by the actions of so-called students form Asia, in particular India.
I live and work in Asia and cheating the system is expected.
Here is the Panorama broadcast investigation
http://www.bbc.com/news/uk-26024375
Same outcomes as ABC 4Corners investigation
Last year Immigration NZ declined 10,000 visa applications from sub-continentals
Watched a video of an Auckland Council seminar run by Bernard - ex Reserve Bank honcho Arthur Grimes wants to see the market flooded with supply which he says will lead to a 40% house price reduction. Better and faster option would be to slash immigration - unless that happens house prices unlikely to correct.
I remember paying 24% interest and working 60 plus hours a week which didn't seem lucky at the time.
That turned out to be a good buy, wasn't so lucky on the next one. Now I think about the property cycle before I buy any realestate.
If your daughter is buying in the provinces she should be good, but Auckland would scare the crap out of me.
but yeah, why not, all indications are more immigrants and lower interest rates means rising prices.
The NZ Herald had a very interesting graph on their website yesterday, which has mysteriously been removed, that appeared to show the government have been vastly overstated the drop in departures from NZ.
In fact looking at the graph they had, long term departures from NZ had gone up in the first few years of this government, and has only really come down in the last few years, but not by as much as what appears to be getting spun in the media.
The real problem is the shear number of long term arrivals, but key wants to keep his badly run little ponzi scheme going, and keep the smoke and mirrors around this economy as much as he can.
I'm picking they didn't just make it up themselves, the nats have a proven track record of misinformation, so it doesn't surprise me that they have spun this little yarn as well, another yarn that appears to them to excuse them from actually doing something, like I dunno, actually governing the country.
heres the link, they took out kiwis so you could clearly see the student visa rort
we need a vote on immigration
http://insights.nzherald.co.nz/article/rising-migration-numbers-nz
Thanks Sharetrader good to see it is still there, it shows that up until only very recently departures had actually been going up under this government as a general trend, which is definitely not what key has been spinning.
Also that recently arrivals that exclude NZ and Aussie citizens has gone up quite sharply in the last few years, this is contrary to what is being spun by the nats, and our sleepy mainstream media.
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