There was a smidgen of good new on Friday for the New Zealand’s Labour-led Government, with immigration and population growth continuing to ease in the December quarter:
In the year to December, New Zealand’s population moderated to 97,000 with net overseas migration (NOM) moderating to 69,970. This is down from the peak of 100,600 population growth in the year to March 2017, with NOM also down from the peak of 72,480.
The rate of population increase also fell to 2.0% (down from 2.1%), but clearly remains at turbo-charged levels:
This moderation in population growth is welcome news for the newly-elected Labour Government because it fought last year’s election on the promise that it would fix New Zealand’s chronic housing affordability problems (and housing shortage), including by reducing immigration levels by around a third.
That said, Greg Ninness from Interest.co.nz believes the reprieve in immigration could be short-lived and housing pressures could soon intensify:
…there are two opposing trends.
More New Zealanders and Australians are arriving and fewer are leaving, while for citizens of other countries the reverse is true.
That could mean that the year-on-year decline in the total net gain of migrants from all sources which we have started seeing over the last few months, could be short lived.
The number of New Zealand citizens arriving home has been steadily rising since 2012 and is now the highest it has been in any quarter of any year since 1990, and has been surpassed only once since Statistics NZ’s published figures began in 1978.
At the same time, the number of New Zealanders leaving this country long term is declining, with the 7046 that departed in the fourth quarter of last year being the lowest it has been in any quarter of any year since 1993.
The combination of more New Zealand citizens arriving and fewer leaving meant the net gain of 2845 in Q4 2017 was the highest it has been in any quarter of any year since the start of Statistics NZ’s published records in 1978.
Upward risk
If that trend continues at pace, and/or the recent decline in the gain of citizens from other countries starts to slow, there’s a risk that the total gain from net migration could start pushing up again.
That’s a real risk for the Government.
Because even though the rate of population gain from migration has started to slowly decline, it is still running at levels that are putting real strain on infrastructure such as housing, transport and social services.
And although the Government has ambitious plans in areas such as housing, it will likely be at least two years before we start to see significant results from those plans, and probably longer.
So if migration starts tracking up again, there’s a danger the government could be heading into the next election with a housing crisis that’s worse than the one it inherited.
Food for thought.
