Archive | Migration

Small rise in migrant inflow, but Auckland gain marches onward

New Zealand’s net migrant inflow continued upward in February, rising by 28 above the previous record, set in January, to 71,333 for the last 12 months.

The increase over the year to February 2016 was almost 4000, from 67,391.

For the month of February, the net inflow was 8609 (8581 a year earlier). Arrivals totalled 13,793 (13,267), departures 5184 (4686).

Exits to Australia jumped 10% for the month over a year ago to 2564 (2331), and the annual number of departures rose to 24,650 (24,204). Arrivals from Australia rose by 3 for the month to 2235, but are down over the year to 25,684 (25,810), reducing the net annual trans-Tasman gain to 1034 (1606).

The net outflow of NZ citizens continued to decline this February – 3059 out, 2662 in for a net outflow of 397 (439 last February). For the year, the net outflow was 1687 – 31,914 in, 33,601 out – down 57% from the previous 12 months. The next outflow in the February 2012 year was 38,769, falling to 36,713 in 2013 and 17,786 in 2014.

And the flow into Auckland continues, up 653 for the month and up nearly 4300 for the year. The net inflow for the month was 4543 (3890), and for the year 35,313 (31,035). Annual arrivals have risen from 46,954 2 years ago to 52,407 and now 57,156, while departures have held in a range from 21,370-21,850 over those 3 years.

Attribution: Statistics NZ tabales.

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Even in January, immigration leaps

The net migrant inflow leapt over the 71,000 mark for the January year. Long-term arrivals jumped by 1000 from last January to this one while exits rose by 300 for a net gain of 700 to 8446.

For the year, arrivals have risen by 5300 and exits have fallen by just 67.

The net amounts to a rise in immigration for the January year of just under 5400, to 71,305.

Arrivals from Australia were up by 29 and departures to Australia by 20, raising the inflow margin by 9 to 1264 for the year. 2 years ago it was a net outflow of 2888 and, in the previous 2 years, 17,064 & 37,936.

There is still a net outflow of NZ citizens, though not by much. For 6 of the 7 years to January 2013, NZ citizen exits for that month were in the range of 6-7000 and 2-3000 came home. The result over those 7 Januaries was an average outflow of 3800. Net exits for the month went under 1800 in January 2014, under 900 a year later, then to 474 and now to 385.

The annual net outflow has now fallen below the level for one month 3 years ago – 1729 versus 1781.

The latest annual NZ citizen outflow is 2500 below the level of the previous year and a quarter of the net outflow 2 years ago. Before that, the net outflow was measured in 5 digits – 19,687 in the January 2014 year, almost double that in each of the previous 2 years (37,922 & 37,602).

Of the 14,457 arrivals in January, 4400 said their destination was Auckland 1259 didn’t say where they were going.

Of the 128,290 arrivals in the January year, 56,231 (43.8%) said their destination was Auckland, up from 51,831 (42.2%) in the previous 12 months. The net annual inflow to Auckland rose by 3400 to 34,660 (30,369), or 48.6% of the net inflow, up from 48.05% in the 12 months to December.

The January figures set a number of records – the net inflow for the 12 months to December, 70,588, was the previous high. Migrant arrivals, at 128,290, were a record. The previous record, also set in December, was 127,305.

The net inflow from China took to place for the year again, passing India. For the 12 months to January, the net flow from China was 10,197 (9124 the previous year) and from India, 8560 (12,991 after student visa questions), followed by the UK 5981 (3680) & the Philippines 4580 (5127).

Statistics NZ said the 3,537,561 overseas visitors for the 12 months was a record, up 11.5% on the previous year, and the 2,635,331 NZ residents heading overseas was a record, up 8.9% on the previous year.

165,673 NZ citizens took off on overseas trips in January, up from 145,708 a year earlier, and 288,306 came back that month (262,570).

Attribution: Statistics NZ tables & release.

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Economist sees scope for house price fall – my picture more complicated

Infometrics chief forecaster Gareth Kiernan said yesterday the economic consultancy saw “scope for a 12% drop in property values by the end of 2020”.

That turned into this heading: House prices to fall 12% by 2020.

A 12% price fall in 3 years – or a multitude of trend changes? I interpolate:

Some have fallen that much this year while others have been taken off the market because the windfall window has passed. How & what you measure makes a big difference.

When the America’s Cup was first touted as coming to Auckland in the 1980s, my house’s value – along with every other house in the neighbourhood – rose overnight by a million dollars. But few houses actually went on the market to catch this windfall, a handful of homes sold at escalated prices, the cup event didn’t come and the market shot back to where it had been. Did homes drop in value? They didn’t in reality rise.

Auckland was unusual in the wake of the global financial crisis of 2008 – on Quotable Value’s figures, a drop from double-digit price growth in 2007 to a decline of about 7% both nationally & in Auckland in 2008, followed by a 3% turnaround nationally in 2009 – and a rise of 7.3% for the year in Auckland.

By late 2011 – the year housing consents bottomed – Auckland’s house price index was above the level of the previous peak in late 2007, but on low turnover.

Through to late 2016, both prices & turnover rose. Turnover is now down, and you can see vendors facing hard decisions at auction. Yet, at auction this week, some apartments sold at high price levels – above $10,000/m² for secondary stock that’s now “old”. That can be attributed partly to the rising cost of construction for new developments.

The unitary plan has put another factor into the pricing equation, the ability to intensify sections that previously might have been able to take only 2 townhouses. This potential can raise the apparent value of standalone houses throughout suburbia, though it’s actually a change in land values.

Mr Kiernan raises mortgage rates as a factor below, suggesting a rise could keep some buyers out of the market. Higher interest rates or increased supply over the last 15 years, or both, would have suppressed prices. Supply is starting to increase but, while net immigration keeps rising, that supply will still fall short. That could encourage price rises while, at the same time, ordinary local buyers will tot up capital & mortgage costs which will show prices for them must come down.

Over the last 4 years, New Zealand turned – swiftly – from a net outflow of 39,000 migrants/year to Australia to a zero outflow, and a little more slowly to a net inflow of almost that number (33,900 in 2016) just into Auckland.

Those migration tides can reverse again just as quickly but, as I’ve suggested below, other factors come into play and one of those is amenity for new developments.

Kiernan: several risks hanging over economy

Mr Kiernan said the solid outlook for growth – a prediction of 3%-plus gdp growth over the 3 years to June 2019 – masked several risks hanging over the economy: “Mortgage holders in Auckland look particularly vulnerable to even modest interest rate rises that are likely to occur in the next 2-3 years. Debt-servicing costs in the city now take up a greater proportion of income than in 2007, when mortgage rates reached 8.7%. A future rise of 1.5-2 percentage points in mortgage rates would clearly stretch many borrowers in Auckland and squeeze potential buyers out of the market.”

Infometrics predicts that wholesale interest rates will gradually rise further in the next few months and that the Reserve Bank will start increasing the official cashrate by mid-2018.

“Net migration & population growth will be easing at the same time as interest rates start to rise, and this cocktail could be the catalyst for a housing market correction. Apart from the stresses on the market in Auckland, underlying demand conditions in some other regions do not justify current high prices, and we see scope for a 12% drop in property values by the end of 2020.”

Looking at the wider economy, Mr Kiernan turned first to employment: “Despite the unemployment rate edging up to 5.2% in data released this week, the labour market has been tightening across the board. The capacity constraints that have previously been most intense in the construction & tourism sectors are becoming more widespread.

“Infometrics expects to see increased wage pressures as firms battle harder to attract & retain staff, with the unemployment rate dropping back below 5.0% in 2017 and continuing to decline over the next 2 years.”

Next up, international politics: “Heightened political uncertainty also has the potential to derail New Zealand’s growth train. At this stage, the main threat to New Zealand from US President Trump’s policy agenda appears to be potential trade barriers against China.

“Mr Trump has talked about 45% tariffs on Chinese imports, which would reduce American demand for Chinese products, dampening economic growth in our largest export market and undermining New Zealand’s export incomes.

“President Trump’s proposal is a significant threat to Chinese & global economic growth, and New Zealand would not be able to dodge the flow-on effects over the following couple of years if trade barriers between China & the US were implemented.

“Closer to home, a change of government or a shift in the balance of power after New Zealand goes to the polls on 23 September could also affect our medium-term economic outlook.”

Migration factors

Bald assertions can take some filling in to make sense. For migration & population growth, the biggest factor is the Australian economy.

In the June 2015 year, Australia’s net migrant inflow was 168,000, down nearly 10% from the previous year, and 40% went to New South Wales. The country’s population rose by 338,000 (1.4%) to 24.1 million in the year to June 2016. Incredibly, those seem to be the latest figures from the Australian Bureau of Statistics.

The New South Wales economy seems to be in better shape than other states’, which may lead to a resumption of higher emigration from New Zealand in the next couple of years. A resumption of growth in Western Australia’s mining sector looks further away than that.

The Auckland construction market looks overheated and, combined with the unusually high level of infrastructure underway, will drain labour from other parts of the country and require imported labour.

One factor in New Zealand’s migration statistics that’s played down is the proportion of migrants from India, many on student visas and therefore seen as not really permanent migrants. I regard that pool of migrants differently, as a revolving supply because many return home, but still showing a net increase of over 10,000/year, at a similar level to the net inflow from China.

Statistics NZ projections

Statistics NZ’s latest regional projections show Auckland’s population growing at just over 1%/year on the low projection through to 2043, and at nearly 2% on the high projection.

One question there is whether the supply of and for housing will increase enough to dampen the increase in its price. The high growth projection for Auckland over the 5 years to 2023 would see the population up by 200,000 to 1.94 million – by an average 40,000/year, which would require an extra 14,800 homes/year to satisfy demand.

Changing trends will complicate values

The trend in new housing is toward less standalone housing and more intensive development, notably lowrise townhouses & suburban units along with retirement village units rather than a high concentration of apartments. Land values based on higher potential may change that lowrise preference.

A combination of the unitary plan allowing more building height, particularly in both suburban & regional centres, and council organisation Panuku Development Auckland’s regeneration programme for as many as 20 centres around the region could see an increase in apartment living as commercial & retail centre amenity improves.

That would shift the pricing focus away from houses in the most expensive suburbs and to different kinds of home. The expensive suburbs are likely to retain their high pricing levels because of limited supply – one reason they’re expensive even on bad days – but housing elsewhere should graduate to new ranges.

To achieve those changes, more amenities will be needed in suburban centres. As a city apartment dweller told me yesterday, Auckland fares poorly in the provision of amenities for apartment occupants compared to many cities in other countries, such as Vancouver & Sydney.

Some developments provide a pool or a gym, many don’t. Rather than an increase in inhouse amenities, and against council budgets which are very unlikely to allow for an expansion of communally owned amenities, the growth of apartment living in suburban centres could be matched by the separate private-sector provision of amenities.

That in itself would produce 2 value changes – one to reduce the value of apartments by eliminating costly inhouse amenities, the other to increase their value for proximity to externally available amenities.

Attribution: Infometrics release, my own economic date, Statistics NZ, Australian Bureau of Statistics.

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Net migrant inflow creeps up again

The net migration inflow for the year crept up again in December (on a rolling annual basis), staying just above 70,000 for the third successive month at a new record of 70,588.

That was up 334 on the year to November and 8.7% ahead of 64,930 in the 12 months to December 2015.

After rising in large jumps both for December & annually after 2 years of net outflows in 2011-12, the monthly inflow has slowed to 4999. Over the previous 3 years the December net inflows were 2408, 3494 & 4765.

Long-term immigrant numbers for December rose from 10,039 last year to 10,687, while emigrant numbers rose from 5274 to 5688.

Arrivals from Australia slipped from 3035 to 2909 for the month, but stayed 510 ahead for the year at 25,783. Departures to Australia were up for the month at 2608 (2467), but the annual figure fell slightly to 24,220 (24,504). The net flow from Australia remained slightly positive at 301 (568) for the month and 1563 (769) for the year.

Other net annual figures included 10,310 (8877) from China, a large fall from India to 8899 (13,292), and rises from France to 3326 (2966), Germany 3365 (2924), the UK 5588 (3614) & South Africa 4297 (2196).

The net flow of Kiwis for the month was inward at 1202 (inward 4280, outward 3078), but outward for the year at 1818 (inward 31,671, outward 33,489).

The net inflow of non-citizens continued to rise, reaching 72,406 (69,655 last year – and it was down at 31,341 in 2010).

The net inflow into Auckland continued to rise – by 380 for the month to 2152, and by 3937 for the year to 33,916. The net inflow into Auckland remained at 48% of the total net inflow into the country for the year, 70,588.

Total migrant arrivals hit a new record of 127,305 (121,937) for the year, lifted by an increase of 3817 on work visas to 41,576 (37,759), while holders of student visas fell by 3306 to 24,562 (27,868).

Attribution: Statistics NZ tables & release.

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Treasury positive about government investment & asset monitoring

A lofty ambition worth aiming for, and an acknowledgment that more, and better, can be done: Prime Minister Bill English wrote, while he was still finance minister, that progress on monitoring the Government’s investments & assets was encouraging, but added: “The job is not done.”

Then, in Treasury’s investment management annual report, out today, he wrote: “More action & innovation is needed to continue to improve in important areas such as benefits & asset management. I expect active stewardship from the [Government] corporate centre, so that the investment system delivers the best value for New Zealanders, not just today but for decades to come.”

Budget & public services deputy secretary Struan Little says in the report the Government is investing in 508 significant projects with a combined whole-of-life cost of $87 billion (up 9 projects & $13 billion from the starting point a year ago): “These investments are being delivered by 53 agencies, across 11 sectors, and 38% of them are being worked on collaboratively. In addition, the Government uses fixed assets worth $93 billion to provide public services and enable social & economic development.”

Immigration warning

One early warning in the report: Immigration will continue to rise. The report says: “Immigration is a critical enabler of New Zealand’s economic growth, and New Zealand has one of the highest per capita inflows of migrants in the OECD. Migrants create jobs and build diverse communities – they bring skills & talents that help make local firms more productive & globally competitive.

“New Zealand competes internationally for skilled migrants, students & visitors. Immigration NZ is a global operation that facilitates travel while managing immigration-related risk.

“Immigration volumes have increased by 51% since 2011-12, and are expected to rise further, which means growing demand for Immigration NZ’s services as visa applications increase.”

The report notes:

  • One in 4 of all workers in New Zealand are migrants; in Auckland the figure is 44%
  • 3 million visitors arrived in New Zealand in the June year 2016, the highest ever annual total
  • International visitors spent more than $10.3 billion in the last financial year
  • More than 105,000 student visas were approved in 2015-16
  • International education is worth $3.1 billion to the economy each year and supports 30,000 jobs
  • Business investor migrants have invested over $4.8 billion since 2009.

Immigration NZ said over 100,000 online applications had already been received on its transformed visa processing service.

The report says 55% of the portfolio by number of projects, and 48% by whole-of-life cost, is being delivered to benefit specific areas – referred to in this report as ‘regional investment’.

40% of regional investment ($16.8 billion by whole-of-life cost) continues to be targeted at the Auckland region, and $12 billion of that is in transport, including the new western ring route, a 48km alternative route around the isthmus to improve network resilience & travel time reliability. Its total expected cost of $2 billion makes it the biggest project ever undertaken by the NZ Transport Agency.

Agencies use a 3-point scale for their performance reports, while the corporate centre & gateway reviews use a 5-point scale to assess projects. Treasury says it’s considering how to better get consistency in assessing project performance.

Data on performance showed the portfolio continued to perform well based on agencies’ self-assessment. 69% of the portfolio was assessed as green, compared to 58% last year.

Link:
Treasury investment performance report to November 2016

Earlier stories:
27 July 2016: First ratings out on government agencies’ management
1 December 2015: Major project transparency brings Christchurch consternation

Attribution: Treasury report & release.

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Building consent highs still don’t match migrant demand

Statistics NZ said today consents for new homes nationally hit an 11-year high in November, Auckland hit a 12-year high for a month and for a year, and Auckland consents represented “almost 40%” of the month’s total.

Against those impressive statistics, the figures show:

  • Auckland is not meeting demand for housing arising from net immigration, let alone natural population increase
  • Christchurch consents continued to tail off as the post-earthquake rebuild has wound down
  • Despite that, Auckland’s share of total consents nationally was 5 percentage points below its national market share at the 2004 high, and
  • Non-residential consent growth has been lacklustre over the last 5 years.

Below, first the figures followed by considerable detail, including some international aspects.

The bald figures against November 2015 or the previous 12 months:
2973 (2831) November consents for new homes, up 5%
30,303 (30,161) new home consents in November year, up 13.1%
$1.001 billion ($911 million) value for month, up 9.9%
$167 million ($153 million) additions & alterations for month, up 9.4%
$1.88 billion ($1.72 billion) additions & alterations for year, up 9%
$1.168 billion ($1.064 billion) total residential consents for month, up 9.8%
$12.56 billion ($10.34 billion) total residential consents for year, up 21.5%

Auckland:
1156 (966) Auckland consents for the month, up 19.7%
10,137 (8934) Auckland consents for year, up 13.5%

Residential sectors:
1886 (1864) new house consents for month, up 1.2%
375 (270) apartment consents for month, up 38.9%
205 (321) retirement village units for month, down 36.1%
507 (376) townhouses & suburban units for month, up 34.8%
21,391 (18,823) new house consents for year, up 13.6%
2596 (2263) apartment consents for year, up 14.7%
1918 (2086) retirement village units for year, down 8.1%
4398 (3621) townhouses & suburban units for year, up 21.5%

Non-residential:
$411 million ($531 million) total for month, down 22.6%
$5.98 billion ($5.8 billion) total for year, up 3.2%
Offices, administration & public transport, $102 million ($114 million) for month, down 10.5%
Offices etc, $1.15 billion ($1.16 billion) for year, down 0.9%
Education buildings, $58 million ($99 million) for month, down 41%
Education buildings, $1.17 billion ($1.08 billion) for year, up 8.4%

Totals (residential, non-residential & non-building construction):
$1.61 billion ($1.62 billion) for month, down 1%
$19.03 billion ($16.55 billion) for year, up 15%

Auckland & its wards, residential month & year:
Auckland: 1156 (966), 10,137 (8934)
Rodney: 55 (75), 909 (787)
Albany: 254 (196), 2274 (2341)
North Shore: 26 (81), 566 (357)
Waitakere: 84 (44), 664 (466)
Waitemata & Gulf: 155 (68), 1125 (1071)
Whau: 19 (23), 307 (185)
Albert-Eden-Roskill: 104 (40), 699 (377)
Orakei: 42 (104), 297 (457)
Maungakiekie-Tamaki: 21 (34), 306 (481)
Howick: 25 (52), 546 (559)
Manukau: 129 (65), 465 (393)
Manurewa-Papakura: 116 (112), 1062 (852)
Franklin: 126 (72), 917 (608)

Outside Auckland:
Whangarei: 70 (51), 658 (444)
Kaipara: 27 (14), 266 (171)
Hamilton: 107 (100), 1245 (1131)
Tauranga: 168 (176), 1704 (1337)
Wellington region: 81 (291), 1536 (1449)
Christchurch & districts: 390 (525), 5368 (6008)
Queenstown-Lakes: 71 (88), 928 (793)

The monthly high

2973 consents for new homes were issued nationally in November, up from 2575 in October, 2831 in November 2015, and the 7th successive month of consents exceeding 2500. January was the only month of the year when consents fell below 2300 (to 1695, a normal summer fall; consent figures for December will be released on 29 January).

Statistics NZ attributed the 11-year high for a month to “increased consents in Auckland & the usual pre-Christmas rush”. The previous high for a month was in March 2005, when 3027 new homes were consented. As I wrote in 2005, the numbers that March were skewed for the second time in 9 months: “This time it was for a combination of 2 increases, both effective from 31 March. One was an increase in the Department of Building & Housing levy, the other new building requirements under the new Building Act – not a levy, but extra requirements.”

The annual figures, their trajectory and foreign influences

30,303 consents were issued nationally for the November year, 13.1% up on the 26,793 in the previous 12 months. The annual rise has been steady since 13,529 consents were issued in the November 2011 year, which was the downpoint of the global financial crisis. On a rolling annual basis, consents fell just short of 30,000 in September and got just over that mark, to 30,161, in October.

Consents averaged just 2200/month over the first 4 months of 2016 and 2700/month through to November. Increasing to 31,000 consents/year will be hard to achieve over the next 6 months unless constraints are reduced on loans to investors and on the ability of first-homebuyers to borrow, and construction costs are constrained. The main cause for those constraints to change is that it’s election year.

Winding back immigration would also affect the election, which means the housing pressure in Auckland should continue unless the other big factor, Chinese investor interest, wanes. The Chinese government signalled tightening on the export of funds over the last few weeks but, as a report from the Asian Financial Forum in Hong Kong on Monday indicated, China’s largest sovereign wealth fund, CIC (China Investment Corp), expects to invest more in the US this year than it did in 2016. It spent $US1.7 billion on 2 Manhattan properties in 2016, the second of those a $US1 billion investment for a 45% stake in a building in the Rockefeller Centre in December.

China’s foreign exchange reserves have slid from a peak of $US4 trillion in June 2014 to $US3 trillion last month – incredibly, a dangerously low level. Trading Economics said the yuan depreciated 6.6% against the $US in 2016, the biggest one-year loss since 1994.

As analyst Jim Rickards has posted in various Daily Reckoning financial newsletters over the last few weeks, China runs into a fight with new US president Donald Trump if it devalues (more), but it doesn’t have the leeway to support its currency’s rise. Further devaluation or the threat of it, official or in effect, would encourage Chinese citizens to keep finding ways of getting money out of the country and, in the blink of an eye, into assets – such as New Zealand property.

Minister says it’s as fast as you can go

Nick Smith, who was housing minister (a title Bill English abolished after taking over as prime minister in December) and remains building & construction minister, said it was the first time in 12 years that consents for new homes in Auckland had topped 10,000.

“The 1156 consents issued in Auckland during November makes it the strongest month in more than 10 years. It is more than treble the 325 consents issued in Auckland in November 2008, when National became government. We need to consistently achieve more than 1000 consents/month in Auckland to match population growth….

“This is the 5th straight year of strong growth in construction, with growth averaging more than 20%/year. This is as fast as you can practically grow a sector as large & as complex as construction without compromising quality.

“This ongoing strong growth shows the Government’s programme to increase housing supply is working. We have aggressively increased land supply with special housing areas in the short term, changes to Auckland’s planning in the medium term and the national policy statement on urban development capacity & Resource Management Act reforms in the long term.

“We have complemented this with the Crown land programme and a record level of direct Government projects to build homes, such as Hobsonville. We’ve also provided record levels of assistance for first-homebuyers with the KiwiSaver HomeStart scheme, which has helped more than 20,000 people into their first home with about $500 million in KiwiSaver withdrawals for a deposit.

“This Government is step by step, development by development, getting on and addressing New Zealand’s housing challenges.”

Consent figures fall short of migrant need

The statistics show 38.9% of new home consents in November were in Auckland, up from 34.1% in November 2015. For the November year, Auckland’s market share was 33.5% (29.6%). Back in November 2004, the previous high for Auckland, the 1181 consents represented 44% of the market.

At a ratio of 2.7 residents:household, Auckland would have needed 12,421 new homes for its net intake of migrants for the latest year. The 10,137 consents for the November year (homes to be built) represent 81.6% of homes required in the last year. But for homes to be built in time to receive those immigrants in the last year, consents would have been needed beforehand. In the previous 12 months to November 2015, the 8934 consents issued for new homes in Auckland would have met 71.9% of the requirement for the next 12 months’ immigrants, ignoring natural increase.

Under the government-council special housing accord that ran from October 2013-September 2016 (with an extension for approved areas not fully processed), the target was 39,000 consents over 3 years (initially emphasised as houses, later emphasised as houses & sections consents, though the Ministry of Business, Innovation & Employment thinks it’s just houses) – 9000 the first year, 13,000 the second, 17,000 the third.

Dr Smith and Auckland’s mayor until last October, Len Brown, maintained they achieved 123% of the target in year 1 and 98% of the target in year 2 – 23,806 dwellings consented & new sections created.

The final government-council report on the accord said 37,538 net sections had been created & dwellings consented – 96% of target. It added: “Over the next 14 years, over 98,000 new greenfield & brownfield dwellings & sections are known to be in the development pipeline delivering an average of just over 7000 dwellings/year.”

Non-residential still in doldrums

Non-residential consents almost matched those for new homes in the November 2011 year – $3.64 billion against the residential $3.756 billion. But in the next 5 years, consents for commercial & public sector buildings have been left well behind.

Over those 5 years consents for new homes rose steadily – to almost $5 billion, then $6.3 billion, $7.7 billion, $8.6 billion and, for the last 12 months, $10.7 billion. That’s a total $38.3 billion for new homes since 2011.

In contrast, the non-residential sector’s consents almost made it to $4 billion in 2012, got to $4.15 billion the next year, then to $5 billion, $5.8 billion & just under $6 billion for the latest 12 months – a total just under $25 billion.

Links:
MBIE, Auckland housing accord
Final accord report
Mingtiandi, 17 January 2017: No capital controls here! China’s CIC set to boost US investments in 2017
Daily Reckoning, 17 January 2017: China’s bogus currency war promise
Trading Economics: China foreign currency reserves

Earlier stories:
23 December 2016: 48% of net migrant inflow stops in Auckland
2 November 2016: National policy statement on urban development capacity takes effect in December
1 November 2016: Auckland share of new home consents drops, intensive ratio holds

Attribution: Statistics NZ, MBIE, Mingtiandi, Daily Reckoning, Trading Economics, ministerial release.

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48% of net migrant inflow stops in Auckland

The net migrant inflow for the November year rose 10.5% from 63,659 last year to 70,354. For the month, the rise was 1%, from 7019 to 7091.

The latest figures from Statistics NZ show a rise in the annual figure of 72 from the 70,282 to October.

Both monthly & annual figures have been steadily rising for 6 years, while the annual tally of departures has fallen for the last 4 years. Exits reached a low point for the month of 3615 last November, but rose to 4083 last month.

The net result has been a net inflow every November in the last decade, but there were net outflows for the year in 2011 & 2012. Arrivals for the month were in a range of 6300-8600 from 2001-13, but in the last 3 years the figure has jumped to 9866, then to 10,634 and now 11,174, boosted by returns of Kiwis from Australia.

For the year, migrant arrivals have been in the range of 80-88,000 for all but one of the years from 2004-12, following the 2-year spike in 2003-04, when arrivals zoomed up to 96,000 & 93,400. The arrivals figure hit 93,000 in 2013 then rose to 108,800, to 120,900 and now to 126,657.

Departures fell in 2002-03, to 57,900 & 56,600, climbed to an annual rate of 86,200 in 2012. The number then fell sharply to 73,500 and dropped below 60,000 in each of the last 3 years, getting down to 56,303 this year.

Arrivals from Australia are nearly double the number in the years 2006-08 – up from 25,000 in the November 2015 year to 25,900 this year, compared to numbers in the 13,000s in 2006-08. Whereas there was a net outflow of 20,000 to Australia in 2006, rising to 35,000 in 2008 and still at 4500 in 2013, there has been a small net inflow in each of the last 2 years – 371 & 1830.

The number of migrants coming into Auckland has been rising steadily – from 45,000 in 2014 to 51,000 to 54,765 in the last 12 months. Net, those rises were 22,539 to 29,675, and 33,536 in the last 12 months. That last figure is 48% of the total net inflow to New Zealand, up from 42% the previous year.

Attribution: Statistics NZ tables & release.

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Migrant inflow tops 70,000/year

The net inflow of migrants climbed over the 70,000 mark for the year in October, after falling 46 short in September. The new record is 70,282, up 7805 (12.5%) on the previous 12 months.

The increase for this October over last October was 4.3% to 7942, from arrivals up by 475 to 11,694 and departures up by 147 to 3752.

For the 12 months, arrivals rose 5% (120,123) to 126,117 and departures fell 3.1% (1811) to 55,835.

Statistics NZ issued a reduced version of its monthly migration statistics today as its systems have only been partly restored since the 14 October earthquake which seriously damaged its Wellington office.

Overseas visitor numbers of all types rose 13.5% (30,867) this October over a year ago to 260,246, including increases of 5.8% (5776) to 105,664 from Australia, Chinese arrivals up 8.6% (2320) to 29,360, and US arrivals up 32.1% (5024) to 20,688.

Attribution: Statistics NZ release.

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Migrant inflow just short of 70,000

Net immigration reached a record 69,954 in the September year, up 8700 from the previous year and 24,500 more than 2 years ago, and a high proportion of the influx settles in Auckland.

From arrivals in the region of 53,844, up 3800 on last year and 10,000 on the previous year, Auckland’s net inflow has risen from 21,013 in the September 2014 year to 28,395 last year to 32,768 in the last 12 months.

In each of those years, the departure rate has shrunk slightly, from just over 22,700 2 years ago to 21,076 in the latest period.

The same story can be applied nationally: exits have shrunk as more Kiwis have returned from Australia, and the exit rate of new immigrants has also shrunk, most likely also helped by the downturn in the Australian economy.

A turnaround across the Tasman will see those figures reversed, and it could happen quickly, but there’s no sign that such an upturn for Australia will happen anytime soon.

Statistics NZ categorised 94% of the 125,642 arrivals in the last year when it released its monthly statistics last Friday: 32% on work visas (including working holidaymakers), 29% NZ & Australian citizens (with rights to enter), 20% on student visas, 13% on residence visas.

The NZ-Australian component has been rising by about 2000/year, reaching 37,044 in the latest 12 months. The number entering on work visas has risen faster, by 4-5000/year, reaching 40,184 in the latest 12 months. The other big category, those on student visas, rose by 5600 2 years ago but slipped slightly in the latest 12 months to 25,597.

India has been the greatest source of migrants on student visas (7538, down from 10,708 the previous year), followed by China (5756, up from 5215 the previous year).

Also feeding into provinces

All of that is about growth, mostly in Auckland but also feeding into many provinces around the country. Net migration into the Waikato doubled from 2 years ago to 2618 in the latest 12 months, and the figure into the Bay of Plenty rose from 782 2 years ago to 2597. Into Wellington, the figures were 1066 2 years ago to 3430 in the latest 12 months. The net inflow into Canterbury has stabilised – 5591 2 years ago to 6800 to 6847.

A contributor to the rise in net immigration is the decline in exits – 55,688 in the last 12 months, down 2000 from the previous year, down 31,000 from the departure rate in 2012. Along with the rapidly escalating arrivals figures – up by 42,000 on the arrivals in 2012, up by 6800 on the number arriving last year – the decline in exits has helped boost migration from a net outflow of 3280 in 2012, to 15,174 in 2013, 45,414 in 2014, 61,234 in 2015 and now 69,954.

Attribution: Statistics NZ tables & release.

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Immigrant rules tightened slightly

Immigration Minister Michael Woodhouse announced changes yesterday to the Government’s residence programme for migrants for the next 2 years.

The changes include:

  • cutting the planning range for residence approvals for the next 2 years by 5000 – from 90-100,000 to 85-95,000
  • raising the points required for residence under the skilled migrant category from 140 to 160 points
  • reducing the number of places for the capped family categories from 5500 to 2000/year.

Mr Woodhouse said: “Today’s announcement demonstrates the Government is taking a responsible, pragmatic approach to managing immigration.”

That statement was made against a background of record migrant inflows – a net 69,119 for the latest 12 months, including a net 32,187 into Auckland. The net inflow has risen as migration to Australia – up at a net 40,000/year 4 years ago – has reversed to a small (under 2000) net inflow to New Zealand, and emigration generally by NZ citizens has fallen.

In a media release headed NZRP changes to strike the right balance, Mr Woodhouse spoke of the changes not as a response to the high immigrant numbers but as a standard review: “Migrants make a valuable contribution to New Zealand both culturally & economically, and the Government periodically reviews all our immigration settings to make sure they are working as intended. While we are confident our immigration settings are working well, the NZ residence programme is reviewed every couple of years to ensure we have the right number & skill mix of people gaining residence.

“As part of that review, today I am announcing a small change to the total number of people gaining residence. We will also be making some changes to better manage the skilled migrant & family categories at a time when demand for gaining residence under these categories continues to grow.

“Increasing the points required to gain residence from 140 to 160 will moderate the growth in applications in the skilled migrant category and enable us to lower the overall number of migrants gaining residence.

“Changes to the family category, including temporarily closing the parent category to new applications, will also reduce the total number of migrants being granted residence.

“Raising the points will also prioritise access for higher-skilled skilled migrant category migrants, ensuring we strike the right balance between attracting skilled workers that allow companies to grow and managing demand in a period of strong growth.”

Earlier story:
22 September 2016: Net migrant inflow returns to 69,100

Attribution: Ministerial release.

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