Migration is a hot topic at the moment, with international immigration to New Zealand running at record levels, with a net gain of 58,300 people in the last year. This unprecedented immigration is helping to boost the economy, and sectors such as property and retail. But how accurate are the figures, and what do they really mean for our industry?
Looking at the Stats NZ release and most of the media coverage, you could be led to believe that 26,800 people, or 46% of the nationwide total, ended up in Auckland.
The figures for Auckland (or for other regions) are based on what people fill out on their arrival or departure forms. However, there’s a lot of missing data. Around 17% of immigrants don’t fill out which region they’ll be moving to, and 10 percent of emigrants don’t fill out which region they left from. Oddly, these migrants don’t get assigned to any region – they’re just moved into a “not applicable/not stated” category instead.
This means that the true immigration into Auckland (or other regions) is understated. We estimate that Auckland actually received about 34,600 net immigrants in the last year, or 60% of the national total. That’s much higher than the headlines suggest.
These are big numbers, because in a typical year Auckland’s “natural increase” (births minus deaths) is around 15,000. And a more typical level of immigration is 10,000. We’re running at more than three times that, although it’s anyone’s guess how long it will last – previous immigration booms have been short-lived.
In the last year, Auckland’s population probably grew at double its normal rate, and international immigration made up something like 70% of the growth instead of 35%. This has all sorts of effects. Firstly, it’s contributing to skyrocketing house prices. Secondly, it’s a “push” factor which will encourage older Aucklanders – empty nesters, people wanting to retire and so on – to shift to other regions. Young Aucklanders may do the same if they feel disillusioned by the housing market.
But this unprecedented immigration is also helping to boost the economy, and the retail sector. And in the case of international students – who seem to make up a large share of the “immigrants” – it’s helping our export sector. It’s speeding up Auckland’s evolution into a more multicultural city, and the people moving out of the city will help to reinvigorate the regions.
These migration flows will be very lucrative for people in the property sector who are well placed to take advantage of them – for more, take a look at our research publication, Constructive Thinking, from earlier in the year.
With a Masters of Commerce degree in economics, John Polkinghorne is a property professional with vast experience in New Zealand’s commercial property industries. He provides retail and property consultancy and analysis including location strategies to many New Zealand property owners, developers and city councils.