Fewer work visas are being approved as the total number of overseas workers in New Zealand gets back up to pre-Covid levels.
The latest figures from the Ministry of Business, Innovation and Employment show 13,836 work visas were approved in July this year, which apart from the three years of 2020-2022 which were affected by Covid-related travel restrictions and their aftermath, was the lowest number of work visa approvals in the month of July in the last 10 years. See the first graph below for the trend.
Work visa approvals are also lower on an annual basis, with 197,418 approved in the 12 months to July this year, down 33,048 (-14.3%) from 230,466 approved in the 12 months to July last year.
Work visa approvals peaked at 243,195 in the 12 months to July 2019, and were above 200,000 a year for 2016 to 2019 July years.
However while the number of work visas being approved appears to be in a modest decline, the number of overseas workers in the country is not.
According to MBIE there were 188,634 people in NZ on work visas at the end of July this year.
That's within a whisker of the 190,263 here pre-Covid in July 2019, and well ahead of the 168,105 in the country in July 2018.
However their impact on NZ's population is probably much greater than those numbers suggest.
The second chart below shows the number of people in NZ on work visas at the end of each month going back to 2008.
This shows their numbers follow a very regular seasonal pattern and steadily increased from 2011 to early 2020.
Numbers then began dropping away sharply in April 2020, falling to a low point of 108,336 in September 2022, and started rising steadily again from October 2022.
Because that period coincided with Covid-related travel restrictions, it would be easy to think that was the main cause of the downturn in the number of work visa holders in the country.
But there was also another factor at play - the 2021 Residence Visa Approval Scheme.
This scheme provided a fast track approvals process for people who had been in NZ on work visas for several years and wanted to apply for residence visas.
Applications for residence visas under the scheme have now closed and it is essentially being wound up as Immigration NZ processes the last stragglers - just 15 residence visa applications under the scheme were approved in July this year.
However between December 2021 and July 2024, 211,335 residence visa applications were approved under the scheme.
This caused a massive decline in the number of work visa holders, as people transferred from a work visa to a residence visa, and a correspondingly massive increase in residence visa holders.
Between January 2021 and July 2024 the number of people in NZ on residence visas, as measured by MBIE's truncated data, more than doubled, from 161,183 to 333,198.
The effect of this is easily seen in the second and third graphs below, one showing a huge but temporary decline in the number of people in the country on work visas, and the other showing a correspondingly huge surge in the number with residence visas.
Given that so many migrants to NZ originally arrived on work visas and later obtained residence visas, and that trend is likely to continue in the future but probably at a slower rate than was evident during 2022/23, the impact overseas workers have on our population growth and therefore our economy, is almost certainly much greater than is suggested by the work visa data alone.
15 Comments
The only reason average rents have statistically gone down in certain suburbs is because the lack of interest deductibility artificially pumped the proportion of rentals that were new builds. Now that this has been reinstated older houses are available again.
With council rate hikes only just being realized, and high immigration, I fully expect rents will increase above the 3% pa target for the next couple of years
So why aren't rents 3% higher today than they are? Because the market can't pay it.
That is the answer to all things property; "It's what the tenant or aspiring gatherer of more Debt CAN pay that determines market price". Whether that's the amount of rent attractable or the amount of Debt assumable to buy/continue to own property.
Scrap the ability of new Debt to be reliant on a revaluation of present holdings when applying for more Debt, for instance, and just see how many loans CAN be taken out. Make any new loan reliant on cash-flow and not a revaluation of the collateral, and amateur property speculation will die on its knees.
So why aren't rents 3% higher today than they are? Because the market can't pay it
That is simply not true. The 12 month rolling average for rent in May 2024 showed an increase of 5.2%. And the trend is showing an increase. So yes. Rents are more than 3% higher than they were 12 months ago.
The last time rents increased by less than 3% was 2012.
We are outsourcing a few jobs, for the first year the company puts the person on the ground in AKL, then off to India for the next 4 etc. High end coding jobs, but old languages. Replacing retiring workers, who will train the out source workers over their remaining 2-3 years. One will be in 70's by then.
There is a lot of this going on across banking and insurance, mainly mainframe / core system / cobal etc etc
Will be adding to visa numbers... these jobs will never come back, but at the same time young coders want to work CI/CD dev ops cloud not cobal
The Spruikers all came to Spruik Barfoot failed auction numbers, and now they have to read immigration numbers, must be disappointing...
I have noticed the real estate stats are no longer coming out at the same time each week etc, I suspect its to try and avoid the DGM comments around them and try to change the narrative to "falling rates be quick"... "the crash is behind us etc"
They never seem to comment on job seeker numbers perhaps its because a job seeker is not a marginal buyer. I know someone running a water bottling plant out Eastern BOP, its very hard to find good workers, who are reliable and can test drug free so they can work on plant. They pay above minimum wage.
I suspect the recently made unemployed will be off job seeker as soon as they can find a new job, they truely need the help
some recent stats
https://www.nzherald.co.nz/nz/jobseeker-benefit-more-than-half-of-18900…
Maybe but I think the NZ Property Market has a huge number of head winds, and IMHO there may well be other markets that offer better returns, Gold for example is looking great. Remember BTC at $300 then $3000, now? Well gold is only 4k NZD, how many people do you know who own BTC? How many who own investment in gold? (not rings etc) .
Gold has legs to run and run. Its owned by central banks as a hedge, that's interesting isn't it. Once there are Gold Investment Facebook groups, it will be worth getting out. Its possible that gold may increase more in a month then in a lifetime... but would it be about the collapse of fiat in which you are valuing it? Best hedge ever
Yip you are at risk of being abused as an unintelligent ‘gold bug’ if you admit you own gold! (but who cares..). I moved a small amount of net worth to gold in 2019 when interest rates inverted and it’s been a decision I don’t regret. It’s been tracking away upwards while there’s been a lot of volatility in other assets (including bonds).
Why do we need to label people as being either DGM or spruiker? The vitriol and name calling adds nothing to the quality of the commentary on here. And trying to put people into one of these two mental categories means there is little ability to rationally reason, with an open mind, with peoples data/points of view.
(if anyone in the future catches me using the terms, please call me out as a hypocrite).
"...recipients of the main Jobseeker Support payment now projected to spend an average of 13 years on a benefit"
https://www.thepress.co.nz/nz-news/350176008/welfare-dependence-soars-s….
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