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What increased migration means for New Zealand's towns and cities

  • Opinion
  • May 17, 2016
  • John Polkinghorne
What increased migration means for New Zealand's towns and cities

Migration dominated population growth in 2015

New Zealand’s immigration boom continues to break records and we have been following its progress with interest. The net migration into the country in 2015 was 65,000 people, the highest it had ever been. It’s a figure that made our natural increase (births minus deaths) of 28,000 people look rather tame by comparison. Given that in a typical year, we would have only had around 12,000 net migrants it’s quite astonishing!

Migrants, or just students?

Realistically, these migration figures are not quite what they appear as they group permanent movements together with long-term ones. Everyone who plans to live in (or leave) the country for more than one year is categorised as a migrant for these purposes, so this includes international students on multi-year courses. International students have been a big driver of the current boom, although there are certainly other factors in play: More ex-pat Kiwis moving home, more people entering on work Visas, etc.

The dark side of education

International education is good for the country. It’s a major export, it strengthens our overseas networks and some students may eventually become proud Kiwis themselves. However, the boom starts to look a bit shaky when the New Zealand Herald is suggesting that there is widespread fraud among student visa applicants from India, and half of the 21,000 applications in the last 10 months have been declined. With headlines like these added to cases of students being paid a fraction of the minimum wage to work in restaurants and other businesses, the government may take a harder look at Visa and immigration requirements.

These issues could damage our reputation, and make the country less attractive to legitimate students. The international education industry has been prone to boom-bust dynamics in the past. We’d be better with a smaller industry that is stable and well-respected than with something built on dodgy foundations. So, setting aside these concerns, what are the impacts of the current migration boom, and what will happen if it dries up?

The impact differs by region

Most new migrants choose to base themselves in Auckland, whether they are here to study, or to work and settle down. The arrival of some 40,000 new migrants into Auckland in just one year has had many flow-on effects in a city of 1.6 million. We’ve touched on these effects in a couple of previous NiB articles; retailers and property developers will benefit, and house prices are being pushed up.

Many Aucklanders are also being ‘pushed out’; either despairing of ever being able to get on the property ladder, or cashing in their chips if they already had a home in the city. As we’ve noted previously, this is 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 changes were already underway, although they’ve probably been sped up as a result.

If the migration boom ends - and it inevitably will - we expect these changes will continue, but at a slower pace. It may even take some of the hot air out of the Auckland property market! Even if the international education market stabilises at its current high level, it will eventually stop boosting our migration numbers; the number of students coming in each year will equal the number going out. This will happen sooner or later.

As for other migration, this could stay high for some time to come – but, just as easily, it could turn around very quickly. The history of New Zealand migration actually looks just as “boom-bust” as our education industry: the migration numbers depend on economic prospects in NZ, in Australia, and on a host of other factors. We’re obviously looking like a desirable place to live at the moment, but it can’t hurt to have a plan in case that changes.

John Polkinghorne is the associate director of RCG, a property, design and research agency. This was republished from RCG's blog.

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