Net migration surges near five-year high

Monday 21st September 2009

New Zealand net migration surged to an annual five-year high as locals continued to stay at home, rather than risk their luck abroad in the face of the worst global recession since World War II.

Still, the number of Asian inbound visitors extended its slump as the strong New Zealand dollar and threat of swine flu discouraged long-haul travel from the region.

Permanent and long-term arrivals exceeded departures by an annual 15,600 in the 12 months ended August 31, the highest figure since November 2004 according to Statistics New Zealand, as the number of kiwis leaving New Zealand slumped 12% over the period.

The number of net inbound migrants rose to 1,600 from 500 a year earlier. Still, short-term visitors slipped 1% to 161,100 last month as weak Asian tourism persisted.

"The global economic downturn has seen unemployment rise in both countries, deterring New Zealanders from relocating," said Jane Turner, economist at ASB.

"The pick-up in net migration will act to underpin retail spending and housing demand over the next 12 months."

Strong inbound migration has reignited demand in the property market at a time when the deepest recession in more than 30 years has sapped issuance for new building consents. House prices have gained 4.4% in the past four months, but Reserve Bank Governor Alan Bollard has damped speculation a housing bubble will return, as new building permits increase to meet demand.

Turner said tourism has held up reasonably well in spite of the slump in Asian visitors due to the fears of an influenza pandemic. The high New Zealand dollar is continuing to hurt the sector and could inhibit growth in the future.

The kiwi dollar's "appreciation over recent months means New Zealand tourism will be poorly placed to benefit from an increase in overseas consumer confidence as the global economy recovers," she said.

The number of short-term arrivals from Japan slumped 39% to 5,586, while the number of Chinese tourists tumbled 29% to 4,578 and Korean visitors slipped 34% to 4,200. Australian short-term arrivals climbed 12% to 88,347, helping offset the declines in long-haul tourists.

Earlier this year the government and Air New Zealand announced a joint $5 million marketing venture aimed at attracting more Australian tourists across the Tasman. Prime Minister John Key estimated the initiative will have an economic benefit of some $65 million.

Businesswire.co.nz

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