Tag Archives | Migration

Migration – quick numbers

Below are the basic migration numbers for the month of August & 12 months to August. I’ll fill in some gaps this afternoon with a longer story, including a few inputs likely to change the trend.

The bald statistics:

Net migrant inflow August: 5120 (5450 in August last year)
Net migrant inflow August year: 72,072 (69,119; 72,402 in the 12 months to this July)
Migrants into Auckland in August: 4683 (4430)
Migrants into Auckland in August year: 59,700 (53,365)
Net Auckland inflow in August: 2754 (2711)
Net Auckland inflow in August year: 36,796 (32,187).
Net outflow to Australia in August: 330 (22 inflow)
Net outflow to Australia in August year: 1464 (2588).

Attribution: Statistics NZ tables & release.

 

Continue Reading

Immigrants drive 2%/year population growth, 10-14yos decline

New Zealand’s population grew by over 2% in each of the last 2 June years, and by a record 100,400 in the last 12 months.

Over the last 5 years, the population grew by nearly 390,000 – exceeding the population of Christchurch.

At 30 June, Statistics NZ estimated the resident population at 4.79 million. By tonight, it exceeded 4.8 million – 4,805,505 on the Statistics NZ population clock as I write.

Over the last 4 years the natural increase has been under 30,000/year, compared to annual increases up to 36,200 during the previous 7 years.

The migrant figure went negative in the June 2012 year – 3200 more people leaving than arriving – but in the last 4 years the net migrant inflow has totalled 238,000, of whom 72,300 have arrived in the last 12 months.

Statistics NZ said the current gain from net migration equated to 15 people:1000 population. Population statistics senior manager Peter Dolan said much higher net migration rates were experienced in the late 1870s, and similar rates to today were also experienced in the early 1900s & early 2000s.

“Our current net migration rate is high by New Zealand standards, but historically it has fluctuated more than other countries. At the moment we’re experiencing rates similar to Australia’s in 2009.

“Most migrants are arriving on short-term work & student visas. However, many of them extend their visas, or transition to other visa types including residence visas. It makes sense to count long-term stayers as part of our population, rather than as short-term visitors.”

Mr Dolan said half of last year’s growth was in the 15–39 age group: “This reflects the contribution of migration to our population growth, with net migration of 50,000 among those aged 15–39 years.”

As a result of recent migration flows, the share of New Zealand’s population aged 15–39 years rose from 33% in 2013 to 34% in 2017. This was a reversal of the trend that saw that bracket’s share drop from 41% in the mid-1980s.

Growth of the broad 65+ age group has continued to accelerate, up 25,000 in the last year, as the large birth cohorts of the 1950s-early 1970s begin to reach those ages.

The population at the oldest ages is also growing, reflecting decreasing death rates at all ages over a long period of time. The 90+ population is now 30,000, compared with 20,000 in 2007. It’s projected to reach 40,000 in the late 2020s and 50,000 in the early 2030s.

One group that has increased more slowly is the under 5s – up by just 800 in the last year and by 12,720 over 10 years. The 10-14 age group’s numbers rose in the last year, but both the last 2 years were lower than 10 years ago – 306,380 in 2007, 294,330 last year, 301,360 this year.

Link, and links to graphs:
National population estimates at 30 June 2017

Attribution: Statistics NZ release & tables.

Continue Reading

Half the record net migrant inflow is into Auckland

The net inflow of migrants continued to rise in June, reaching a record 72,305 for the June year – and 50% of that total was into Auckland.

Immigrants giving Auckland as their destination rose by 6142 to 59,076 for the 12 months, rising from 42.3% to 45% of all immigrants. The number not giving a final destination fell from 21,244 (17%) to 18,840 (14.3%).

The meteoric rise in net immigration over the last 5 years – from a net outflow of 3191 in the June 2012 year – has resulted from a combination of rising immigrant numbers and declining emigrant numbers. But in the last 12 months that picture has changed slightly.

For June, the number of immigrants was up by 950 to 9158, continuing a steady rise since 2010. On the departures side of the ledger, emigrants dropped to 4534 last June but rose to 5145 last month.

For the June year, arrivals rose from 82,305 in 2010 to 131,355 in the last 12 months, with big jumps in 2014-216, slipping back to a rise of 6300 in the last months. Departures declined from 87,593 in the June 2012 year to 55,965 in the June 2016 year, but bumped up to 59,050 in the last 12 months.

For Auckland, the net inflow in June was 2106 (1726 & 1571 in the previous 2 years). For the June year, the net inflow rose from 26,834 to 31,778 to 36,650 – 50.7% of the total net inflow.

The number of immigrants from Australia dropped slightly for both month & year – by 70 for the month to 1612, and by 262 for the year to 25,441.

Exits to Australia rose for both month & year – by 160 to 1781 for the month, and by 1111 to 24,881 for the year. The net gain shrank from 1933 to 560 for the year.

Other major immigrant sources for the year were China with a net inflow of 10,351 (9688 the previous year), India 7409 (12,118, down chiefly because student visa numbers declined), the Philippines 4646 (5010), the UK 6728 (4138) & South Africa 4867 (3054).

Attribution: Statistics NZ tables & release.

Continue Reading

The migration debate: Which way forward?

Statistics NZ will publish the monthly migration figures this Friday and, on recent trends, the net inflow is likely to be just over 72,000/year. The Labour Party believes it can cut that by 20-30,000/year by enforcing rules more tightly.

Gareth Kiernan.

On Friday, economist Gareth Kiernan warned that cutting the number sharply could cause a slump. Mr Kiernan’s premise seemed to be that more migrants were needed to service the needs of more migrants, and that cutting the number of migrants would take away the workforce needed to service those extra migrants.

His second point was not about migrants but about the behaviour of the Reserve Bank. His slump would arise not so much from cutting immigration but from the central bank ignoring changes in the economy and raising interest rates anyway, thus harming the economy.

All political parties agree that immigrants should add to New Zealand, not detract, and the Government’s critics take that a step further, saying the direction “export education” has taken, toward low-level learning & backdoor entry to permanent residency status, should therefore be curtailed.

Who builds our houses?

The first irony in New Zealand’s immigration debate is that many of the companies building much-needed houses in Auckland are owned by immigrants, often with investor support in Hong Kong or China.

You could say that, without so many immigrants from Asia, the input of these Chinese builders wouldn’t be needed. However, 2 of New Zealand’s biggest housing companies through decades, Universal & Neil, have been Asia-owned for years. A third, GJ Gardner, is an Australian franchise. Would New Zealand have built as many houses as it has in recent years without that foreign input?

How to get voters to switch – or not

The second irony is that, since 1972, no party (or party in coalition) has held power beyond 3 consecutive terms, but Labour & the Greens appear determined to hand National a fourth term because they haven’t enunciated policies which will pull voters to them from outside their bases.

As I was writing this, a new campaign call for support arrived in my inbox from the Greens. In the middle of its worthy aspirations was this sentence: “To do this, we need to you.”

We all make mistakes, but I read that puzzling sentence shortly after trying to wade through the party’s verbiage on migration, which read more like a call to support refugees and close the door to people the party doesn’t like, notably rich people.

Under policy point 5, Selecting voluntary migrants, I took greatest delight in point 4, which followed a statement that “people shouldn’t be able just to buy their way into Aotearoa”:

  1. Tighten up on scams in which overseas millionaires buy up NZ property by making business-development promises that they don’t keep. We will do this by
  2. Using a 3-year provisional visa for investor migrants
  3. Undertaking annual audits of investor migrants’ businesses via extended case management, paid for by the business being audited
  4. Ensuring that the audits include checks for viability, sustainability & desirability and are undertaken by immigration officials, an accountant & a marketing consultant. These audits, prepared independently, together with a police report & any complaints, will form the basis of the decision.

I’ve always found the chip-on-shoulder view of life is as distorted as the silver spoon version, and bludgeoning aspiring Kiwis with this vengeful kind of red tape doesn’t seem a good way to make friends.

Labour acknowledges migrant heritage, but…

The Labour Party acknowledges New Zealand’s immigrant heritage in its policy, but says National, in its 9 years heading the Government, “has failed to make the necessary investments in housing, infrastructure & public services that are needed to cope with rapid population growth. This has contributed to the housing crisis, put pressure on hospitals & schools, and added to the congestion on roads.”

Labour, in government, had an immigrant spike in 2003-04 – unannounced, unmanaged and, because local councils had no warning of the influx, they weren’t prepared to cope with it. The economic boost helped the party get re-elected in 2005. National’s spike of the last 3 years has gone for longer, but both have left large infrastructure deficits and speculation-promoting price escalation as direct consequences.

Labour reckons it can cut net immigration by 20-30,000/year.

That’s going to happen anyway as soon as Australia gets back on to what had been assumed to be a never-ending economic growth path, so the immigration cut in New Zealand could go deeper, reducing the net inflow to 10-20,000/year.

Australians thought wrecking the economy was beyond the ability of any politician, but finally they found a couple who could do it. However, the mining sector is looking more positive by the day and “the lucky country” will soon be just that again, and thereby thoroughly inviting to thousands of New Zealand tradesmen.

When those tradesmen start to head west again, New Zealand will once more be left pondering how to fill the gaps. Kneejerk responses aren’t an effective alternative to sound long-term policies, but kneejerk is where the migration debate has headed.

GST sharing rebuff was an opportunity missed

The National government’s unwillingness to share gst windfalls from the rise in tourist numbers made it plain that the governing party’s floundering was exasperating business people around the country; an opposing party that offered a raft of constructive new economic policies incorporating changes to tax distribution could have lifted its vote immensely.

Slump talk

Mr Kiernan, Infometrics’ chief forecaster, thrust his tuppence-worth into this policy abyss on Friday, when the economic forecasting company’s latest predictions indicated gdp growth would slip below 2%/year this year – before any further help downward from politicians slashing migration.

The threatened migration clampdown would lead to an economic slump, he wrote, adding: “New Zealand’s economic growth is being constrained by shortages of labour in key areas, and this problem will become more widespread if there is a significant & rapid tightening in migration policy following this year’s election”.

Slower near-term growth in construction activity & household spending would cut growth, he said.

“Although growth is forecast to rebound during 2018, that pick-up is contingent on the continued supply of labour provided by foreign migrants coming to New Zealand for work, on which businesses have become increasingly dependent.

“High levels of immigration have undoubtedly contributed to stresses around infrastructure & the housing market, particularly in Auckland. But employment growth of more than 1%/quarter over the last 18 months demonstrates the need for workers across the economy.

“Without these inflows of foreign workers & returning New Zealanders, businesses would have struggled to meet growing demand, and cost pressures would be even more intense in areas such as the construction & tourism sectors.”

Mr Kiernan’s warning invites the question: If the number of immigrants falls, so too will demand, and the economy should become more manageable, supposedly enabling a catch-up in the supply of infrastructure & houses. A slowdown, yes, but a damaging slump?

Mr Kiernan said cutting immigration this year would have negative repercussions for economic growth during 2018 & 2019, constraining activity through higher labour costs: “The inflationary risks associated with these cost pressures would also be likely to compel the Reserve Bank to raise interest rates sooner than would otherwise be the case.

“Given the slowdown already occurring in sales activity & house price growth, this potential cocktail of rising interest rates mixed with a government clampdown on migration would be lethal.

“Even with modest increases in interest rates from mid-2018, medium-term growth in household spending will be constrained by high debt levels, which have climbed from 146% to a record high of 167% since 2012.

“Faster lifts in mortgage rates & debt-servicing costs would threaten a jump in forced house sales, hastening a correction in the housing market and hammering consumer confidence.”

Those supposed consequences look like consequences of not adjusting policy to match changed conditions.

Mr Kiernan said the surge in migration over the last 4 years could have been more carefully managed, thereby preventing the housing market imbalances from becoming so critical. But, although he expected net immigration to gradually ease over the next 5 years, “a cautious approach is needed to avoid replacing one lot of problems in the economy with a completely new set. Ultimately, high migration levels are a positive reflection on New Zealand’s economic performance. We’ve been able to attract & retain workers in this country because our growth over recent years has outpaced that in other developed economies.”

Not quite true. A high proportion of immigrants have been low-level students-come-menial workers who have held bottom-rung wages down. At the same time they have increased demand for services, and for housing.

While I’ve said Labour hasn’t enunciated policies that would pull voters from other parties, elaborating on how a reduction in immigration would be done – and what it would achieve for other groups – would rebalance the political scales.

Links to party immigration policies:
Act
Greens
Labour
NZ First
TOP (The Opportunities Party)
Infometrics

Attribution: Infometrics release, party policies.

Continue Reading

Net migrant inflow tops 71,900 for year

New Zealand’s net migrant inflow jumped again in March to a new record of 71,932 over 12 months.

That’s 6.4% (4300) ahead of the net inflow in the previous 12 months.

The net inflow in March has exceeded 4000 for the last 3 years, and this time round the number jumped by 600 – 14% – to 4878.

The number of migrants coming into Auckland jumped by 13% in March, from 4194 a year ago to 5267, and by 10% for the year, from 52,443 to 57,710.

The net inflow to Auckland is up 14.5% over 12 months, from 31,230 to 35,772.

That means 49.73% of the whole net inflow over the last year has made Auckland the destination.

Statistics NZ said migrant arrivals in the last 12 months, 129,518, were a record, while departures were up by 1100 over the previous year to 57,586 after 4 years of declines.

Continue Reading

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.

Continue Reading

Leading banker takes Australian politicians to task on governance, finance, infrastructure, urban prospects

Australian politicians’ ears must have been burning when bank chief Ken Henry addressed the country’s Committee for Economic Development in Canberra on Thursday, because he wasted no words in portraying the destruction – instead of construction – of a sound future they continued to guarantee.

The Unconventional economist on MacroBusiness, Leith van Onselen, wrote: “Dr Henry pulled no punches in admonishing the Government’s negligence in managing Australia’s mass immigration programme.”

Mr van Onselen also raised questions arising from Australian Productivity Commission reports, including An ageing Australia: Preparing for the future.

But migration & age were just 2 of the questions raised by Dr Henry, who chairs the National Australia Bank. He talked about the notion that endless growth was a practical proposition for Sydney & Melbourne, how every proposal for major infrastructure was drowned in political wrangling and – in the sector he knows best – how every tax reform proposal of the last decade had failed.

Below are some excerpts from his speech:

Business at odds with community

“According to our research, Australian businesses see our strong rate of population growth as a positive. …. In the broader community, there is considerably less support for a larger population. People are concerned about the impact of a growing population on traffic congestion, urban amenity, environmental sustainability & housing affordability. And they worry about our ability to sustain Australian norms of social & economic inclusion. These concerns are understandable.

“Australia’s business leaders have to accept responsibility for ensuring that strong population growth, and the investment opportunities that go with it, lift economic & social opportunity for all, without damaging the quality of the environment we pass to future generations. That means that we have to take an interest in traffic congestion, housing affordability, urban amenity & environmental amenity, including climate change mitigation & adaptation….

“If we want better access to skilled domestic workers, then we are going to have to offer those workers the prospect of better lives. If we want modern & efficient infrastructure, then we are going to have to take an interest in the design of our cities; we are going to have to take an interest in regional development; and we are going to have to take an interest in the planning of new urban centres.

“If we want less red tape & less regulation, then we are going to have to demonstrate that regulation is not necessary….

“Meanwhile, our politicians have dug themselves into deep trenches from which they fire insults designed merely to cause political embarrassment. Populism supplies the munitions. And the whole spectacle is broadcast live via multimedia, 24/7. The country that Australians want cannot even be imagined from these trenches….

“Almost every major infrastructure project announced in every Australian jurisdiction in the past 10 years has been the subject of political wrangling. In the most recent federal election campaign, no project anywhere in the nation – not one – had the shared support of the Coalition, Labor & the Greens.

“Every government proposal of the last 10 years to reform the tax system has failed.

“And the long-term fiscal, economic growth & environmental challenges identified in 4 intergenerational reports over the past 15 years?  The opportunities identified in the White paper on Australia in the Asian century? Simply ignored.

“The reform narrative of an earlier period has been buried by the language of fear & anger. It doesn’t seek to explain; rather, it seeks to confuse & frighten.

“Meanwhile, the platform burns.”

Growing Sydney & Melbourne

Dr Henry also spoke about the Australian budget & tax system, a strongly growing but aging population, climate change & energy security, and making the most of the Asian century.

“How will we fund the biggest infrastructure build in our history? And what about infrastructure planning?” he asked, before questioning the sense in adding 7 million people to the populations of Sydney & Melbourne:

“On the basis of official projections of Australia’s population growth, our governments could be calling tenders for the design of a brand new city for 2 million people every 5 years; or a brand new city the size of Sydney or Melbourne every decade; or a brand new city the size of Newcastle or Canberra every year. Every year.

“But that’s not what they are doing. Instead, they have decided that another 3 million people will be tacked onto Sydney and another 4 million onto Melbourne over the next 40 years.

“Already, both cities stand out in global assessments of housing affordability & traffic congestion.

“And even if we do manage to stuff an additional 7 million people into those cities, what are we going to do with the other 9 million who will be added to the Australian population in that same period of time? Have you ever heard a political leader addressing that question? Do you think anybody has a clue?

“At the very least, we are going to have to find radical new approaches for infrastructure planning, funding & construction. And that includes energy infrastructure, critical to our economic performance and our quality of life.

“The biggest challenge confronting the energy sector is that climate change policy in Australia is a shambles. At least 14 years ago, our political leaders were told that there was an urgent need to address the crisis in business confidence, in the energy & energy-intensive manufacturing sectors, due to the absence of credible long-term policies to address carbon abatement. It is quite extraordinary, but nevertheless true, that things are very much worse today.”

  • Dr Henry was Secretary of Australia’s Treasury Department from 2001-11, and was appointed a director of the National Australia Bank in November 2011 and chair in December 2015. From June 2011-November 2012, he was special advisor to the prime minister with responsibility for leading the development of the white paper on Australia in the Asian century. He’s a former member of the board of the Reserve Bank of Australia, the Board of Taxation, the Council of Financial Regulators, the Council of Infrastructure Australia and chaired both the Howard government’s tax taskforce in 1997-98 and the Rudd government’s review of the tax system in 2008-09, and he’s governor of the organisation he was addressing above, CEDA.

Links:
23 February 2017: NAB chair Ken Henry’s full speech at CEDA
Unconventional economist on MacroBusiness, 24 February 2017: Australia can’t build its way out of population ponzi
Unconventional economist, 24 February 2017: Bigger cities are engines for inequality
Australian Productivity Commission, November 2013: An ageing Australia: Preparing for the future
Committee for Economic Development of Australia

Attribution: NAB, CEDA, MacroBusiness.

Continue Reading

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.

Continue Reading

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.

Continue Reading

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.

Continue Reading
WordPress Appliance - Powered by TurnKey Linux