Bernard - exactly, and along similar lines of what I have stated here several times.
Can't look solely at the quantum of immigrants, also have to look at their wealth and skill composition.

Don't forget too that the large recent increases in international students (resulting largely from our favourable exchange rate) will be coming through in those net migration figures. Any student who indicates they will be here longer than 12 months counts in the stats. There was an influx of international students coming in febraury for University.

But Tony Alexander is still talking up migration. This from his statement today:

"We have learnt nothing new about the New Zealand housing market over the past week "“ except perhaps reason for greater optimism about improving net migration inflows. At the same time as Australia has tightened criteria for skilled migrants we have loosened some criteria here. In addition there is growing evidence offshore of a massive reversal of migration flows which have dominated for the past four decades in light of poor economic conditions and job prospects in northern hemisphere developed nations."

What planet is this guy on? He talks about the deteriorating job prospects in the northern hemisphere as if the same thing was not happening here and NZ will be a job rich haven for all these jobless poms - HARDLY!!!!!!!

Its simply economics by numbers, rather than looking beyond the raw numbers.

I would have thought economists would be able to analyse a bit more deeply than looking at the crude numbers.

Obviously not!!!!

I suspect a lot of youth that were heading into trade jobs have been unable to secure jobs and so entered Uni as an alternative.I have several friends whose children who have taken this path.

if our Govt has just borrowed $700 mill this week and we are letting a lot of migrants in who require, Education,Hospitals,welfare,Acc and so on then we need some debate on the subject. Low income jobs are disappearing or been taken up by locals.Jobs are not there for many. If we are now borrowing to meet a shortfall in Govt spending then any likely future costs to citizens need to be carefully considered. "ITS THE PAYING BACK THAT COUNTS", for many this already looks impossible lets not put our Govt in the same position.

another item of good news, more pressure to increase rents in Auckland and may even scare some of the wannabe property vultures into acting now, before their colleagues finally figure it out and move first.

Duh, will I, wont I

Matt in Akld is right. Jobless kiwis coming back will rent and preserve their cash (if any) until they get a job. Doing what who knows.
That and students coming here (which is a good thing) will just cause rents to rise. Or in reality stop them from falling.

Matt in Auckland,

We use the actual figures (Table 1). Hard to seasonal adjust human bodies, we figure.
Also, we compare month on month a year ago, which takes some of the seasonality out.
I have seen reports of an increase in student numbers this year because of lower NZ dollar, but these figures don't break that out. Students count as long term migrants because they're often here for longer than 1 year. This also backs up my scepticism about a 2002/03/04 style migration-led boom in demand for expensive housing. Plenty of empty apartment rentals in Auckland still left to fill.

There was one less day in February this year, which may explain (at the margins) the relatively big fall in tourism (but obviously not the big increase in net migration).

cheers
Bernard

Ray White - no they don't sleep under bridges but as the article says they might go to hostels instead, stay at home, or flat in a cheap inner city apartment (in a market that is oversupplied) not far from Uni
Hardly ingredients for a lot of pressure on the rental market

Scott - EXACTLY!!!!!!!!!!!
the job situation isn't any better here than elsewhere so why would people go to a huge expense to move here when the chances of getting a job are similar to where they are coming from???!!!!! Unless they could line up a job before moving
My brother lost his job in restaurant management in London. He is thinking of coming home, but is finding that there are probably still more opportunities there than there are in Auckland

So far this month 29 different organizations have announced nearly 1600 cumulative job cuts in NZ - see here http://www.interest.co.nz/joblosses.asp

Now these are merely announced cuts - many organizations seek to keep cuts below the radar, and when smaller entities sack one or two people it doesnt reach the media, so I suspect the numbers are far higher than this for March.

Given these circumstances it won't be just the Unions who will be asking the question why immigrant numbers are not being curtailed in the next few months..........

Alexander remains a muppet - any economist who ignores rapidly rising unemployment in an analysis of the housing market isn't worth the time of day.

Ray - there is a large oversupply of inner city apartments so more than enough to cater for the students. And the universities have made the most of the oversupply and taken leases on quite a few apartments so that helps with the hostel situation
I think you need to get back to your real estate job and spend less time putting forth nonsense

Andy - Muppet is a pefect description for Alexander. Funny how he ignores unemployment now, yet a year ago said house price declines would only be large if unemployment went above 6%!!!! thats exactly what they will be doing in the next few months
No credibility
Bullshit busters unite!!!!!
And yes immigration policy must be to cut back - unless the government wants to pay out a lot more dole

Here's our data showing rents going back to 2006
http://www.interest.co.nz/charts/gallery12-170.asp
cheers
Bernard

So an 82.7% increase is a surge and an 8.5% decrease is a slump?

Pete,
There are currently 780 listings for apartments for rent in Auckland on TradeMe. This is after the start of the academic year.
http://www.trademe.co.nz/Browse/CategoryAttributeSearchResults.aspx?sear...

cheers
Bernard

Bernard

and at the beginning of February it was just over 900,that 120 odd decline must have been the apartments that mattinauck says the universities have leased for the poor students so they dont have to stay in hostels that dont exist.

Thanks Bernard, so the 1700 figure is seasonally adjusted and the 3500 figure is raw data. Someone showed me a table somewhere on the Stats website that showed very significant international student increases, don't discount the significance of that in these figures, as February of course is when most of the international students are arriving for uni. Also see my earlier posting re: large enrolment increases at Waikato Uni, also have a friend in Enrolements at Auckland Uni who confirms this too

Pete- I don't have figures in terms of the oversupply of inner city apartments, but its widely recognised and even the very pro-housing Alexander recognised that in his report today .See page 6 of the following link:

http://www.bnz.co.nz/binaries/w190309.pdf

Matt in Auck - "I sense there is a large IQ difference between the property skeptics and the pro-real estate lobby".

I am pro-real estate and have scored between 140 - 170 in IQ tests, how about you?
You talked in another post of leaving for Oz, Rob Muldoon once commented that people doing this raised the IQ level of both countries ;-)

I also have substantial net worth, how about you? Many people in these forums you call "property skeptics" seem to have zero net worth and zero experience in property, which is probably why they are skeptical. They will no doubt find themselves in the same situation 10 years from now from too much procrastination and "analysis paralysis".

Ha Murray - it was only an anecdotal opinion, I just think the comments of skeptics are generally a lot more balanced and nuanced than the pro real estaters.
Good on you if you score an IQ of 170 - that would make you almost an Einstein genius
Me I'm around 140 which is pretty up there too, not wanting to brag but you asked!
My net worth - its OK, not as good as it could be, I'm only early 30s and haven't benefiited from the ridiculous house price increases that the Boomers have. But the Boomers are now starting to suffer big time in the states as the bubble continues to deflate, the same thing wil happen here
But my time will come, and I'm looking forward to buying my own house once prices are about 20% below peak value. Hopefully that will be some time early next year
Your comments about skeptics like me not having experience in property are no relevant - the old rules about property always going up blah blah blah no longer apply in this climate
I hope for your sake prices on houses don't drop 20% - I hope for my sake they do!!!!!

Although degree qualified and previously working in london as a computer programmer i was unemployed in the uk and then working as a bus driver when i came to NZ in 1992 after doing night classes to get up to speed in newer technologies. I was lucky in NZ eventually.

It makes sense to me that the small army of people who have left NZ to go to booming britain or booming Australia or wherever it is will find there way back to pleasant green NZ to be family and friends thru difficult times even if they have to (gasp) work on a farm for accommodation meals and spending money and do the kinds of jobs that many in NZ dont want to do.

Judging by this board NZ has become a land of whingers. In reality this board is far removed from the realities of NZ,

Whinge on! It will make no difference unless you can make it go viral

I must admit i was surprised by rents going up overseas. But then i am a renter now overseas. All that head of steam that went into buying property at any price is now renting......renting and waiting to buy. It must put at least some pressure on the rentals until more rentals are purchased or fewer seek to be the renters.

I know i tend to be anecdotal and it seems to upset people but i began my property experiences by buying houses in areas people did not want to buy to live in, so i could rent 'with my friends' and cover my mortgage.

It really is as Murray says .....the same old thing...not much changes. It cycles. It looks different. It could be different for years but it comes back to the same old thing.

On the other hand long term, property had not risen in value much for hundreds of years. You can reason there will be years or even decades where property does not make much sense to own. But with the worlds reserve currency being the USD and the US being committed to an inflationary route out of their current woes you can reason that in 5 years time there will be inflation about and buyers today will not be totally sorry for what they did. If it were just the US who were committed to supporting the current system then you might say 'they cant do it' but when more or less every country on the planet is committed to ensuring the US does not go down any time soon and therefore bringing them down too, how can it be otherwise that this Titantic of a mess will not be eventually turned around and upright and into calmer seas? If she sinks it is game over anyway.

This might all sound rediculous to younger folk but older folk always sound rediculous to younger folk. Nothing much changes :-)

Paul

I was getting the living **** kicked out of me for suggesting this back in october november. Where were you then when i needed you! :-)

The drop in visitors nothing to do with Chinese New Year moving from year to year?

I picked that National would ease the skids on migration based on who is likely to bankroll Act and National and what they will want.

"Meanwhile the National Party released its immigration policy. You may wonder what this means for the property market. It is clear from research that immigration is one of the key drivers of house price growth.

The logic is simple. If you import more people into the country, then you need more houses. Supply and demand means that prices are then pushed up, this is particularly so in Auckland.

While the latest immigration numbers show the number of people coming into New Zealand is starting to rise, the Nat's policy looks like it wants to increase immigration levels even further. (Although it is unclear what sort of number they are targeting.)
This policy is, arguably, a plus for people who want house prices to rise. (But may be not so good for first home owners wanting to buy.)

My guess has always been that property investors lean heavily towards the right rather than the left. (??????????This was made clear in an email newsletter I saw from one developer this week??????.)"
http://www.landlords.co.nz/blog/heat-rising-in-housing-policy

Murray,

That is complete bollox PC gummint speak.

Bernard

Some of the posters here need to revisit their assumptions

1. Not all immigrants are poor/not cashed up
2. Not all returning expats are 20 somethings (more will be cashed up boomers taking early retirement and trying to make their money go further)
3. Competition for student accom at the bottom end puts pressure on all supply above it

My nephew (23oy Merchant Banker) is about to stay with me for a few weeks whilst he trys to find a flat so yes I think their is more pressure in the market, will this cause a 'boom' in RE prices..no.

I thinks your 8.5% drop in tourism is the leading edge, look to 30%+ if it gets worse overseas. As for the permanent incoming surge, same pressure if it gets worse (and Key enacts his "you can come in but no welfare" clause) I can think their would be a section of the world pop that has fond memories of NZ as tourists who are sick of freezing winters and riots that might "buy in".

Went to a job interview yesterday, interviewed by an American and a Russian, interesting times

Neven

Yes Kieran - I'm sure most of our foreign students come from Britain, India, the Phillipines and South Africa and all will be hurrying back for a better life in their homeland in a couple of years and have no intention of staying in this dump they call New Zealand.

Andrew being right is often a lonely practice ;-)

Matt from Auck - I was once confident you were the only property skeptic in this forum who would accurately pick the bottom of the market and land yourself a bargain as you tended to look at the stats and theories presented objectively. I'm starting to lose that faith.

Matt - thanks for your perspective. Most helpful.

Thanks for the compliment Hugh, I try my best! Its only one man's view, I'm sure there are plenty out there who disagree! And good on them if they do, thats freedom of speech

Yes the majority of foreign students are from Asia most will emigrate to Australia or UK once qualified where they get paid twice as much as NZ.

Bernard your facts are wrong South African and Philippine migration actually dropped. The biggest increases were from India and China.

Kieran - Bernard is right in terms of the net figures. There was a net increase in migrants from South Africa in Feb 09 over Feb 08

But Kieran go to the link I posted above, click on Net Migration, then South africa, then all citizens, then 09 M2 and you'll see figures that reflect Bernard's advice
maybe some little inaccuracies in the stats NZ database?

Bernards numbers are right but he quotes year end arrival numbers not net migration.

The biggest net influx for the year ended feb09 came from UK (8123) India (5630) Philippines(3643) Fiji (3028)

The net monthly figures give a much better picture the biggest net influx for the month feb09 was from India(1366) China(772) UK(740) Malaysia(397)

The jump in net gain from India, China, UK and a drop in net loss to Australia are the main causes for the increase.

mattinauck,now you are sounding like a kid sorting through his jellybeans desperately hoping the nice shiny white ones out number the coloured ones.

Ray - Rather than making petty comments, offer something constructive in the debate.
What are your views on the immigration stats? Do you see them giving property a big boost?
If so, why?
Kieran - good links with stats that backup the surge in international students. It is undeniable that increased student numbers are one of the main factors in the increase in migration

Ray - if you remove the students from the equation there would be a net gain but it wouldn't be that big
Year on year there was a drop in kiwis leaving for Oz, however there was still a net loss of 2500 in February
I'm not so sure that the departures to Aus will slow down too much - if people lose their jobs here then many are likely to consider Aus as an option. After all we are so close that it is quite possible to land a job before moving over permanently
Three guys at my company lost their jobs recently, two of them have gone to Aus

Rob, those programs have always been on TV and have nothing to do with driving the property market. Whether last month was a turning point in immigration or not won't be known for a while yet.
Good on you for buying a place anyway, the median price might come down further but there have been some very good buys recently from desperate sellers and I personally don't think those deals will hang around too long. Also the long term interest rates have headed back up and are likely to continue to do so.

Andrew - please read earlier posts. Most international students will stay in hostels or live in an apartment in the oversupplied inner city market. They will create bugger all rental demand.
Rob y - dream on
Right, I'm retiring from this post, I can't take any more of this pro-real estate dirge
Have fun - I'm going to have a nice feed and a few beers

Kieran - "a new generation calling the shots" is a bit pretentious. I'm not as old as you might think, I just started investing in property at a young age. The idea that the last generation are the only people buying property and somehow have control over it is way off the mark. People that buy property are as diverse in age & race as our population is.
For the replacement cost of a house to not go up in the future, requires every industry involved (developers, builders, councils, lawyers, material suppliers etc) to not increase their charges and that is unlikely.
I'm not saying "buy now before its too late", personally I'd prefer everyone keeps renting my properties from me, I'm just saying people waiting for the price drops talked of by some commentators could be waiting a long time. If you're looking for a mortgagee sale at 30% off and a good interest rate, now might be as good as it gets. I'm not saying "prices will take off again soon" - more likely to drift sideways a few years - I'm just saying by the time the median price bottoms out some of the best buys and interest rates will have been and gone. I know people who didn't buy during the last two busts because they were waiting for prices to fall further, and then didn't buy during the subsequent booms because they were waiting for prices to return to pre-boom levels. 20 years on they are still renting, yet if they'd taken a 20 year mortgage they would now have a freehold property.

My figures are a not quite right prices inflated 90% peaking at $350,000 they are now $330,000 so have dropped 5.7% still essentially still at peak value. If bubble values are removed from the equation under normal circumstances house prices would increase about 1% above inflation (4% capital gain) at this rate a median $185,000 house in 2002 should be $243,000 in 2009 in real terms.
assuming 4% increase prices should be:
2009 - 243,000
2010 - 253,000
2011 - 263,000
2012 - 274,000
2013 - 284,000

If prices keep falling 5% a year then:
2009 - 330,000
2010 - 313,000
2011 - 297,000
2012 - 282,000
2013 - 268,000

So even with a 5% drop each year bubble values won't be removed untill 2013. If prices fall 10-15% like USA & UK or if inflation increases it won't take quite as long. but the fact is there is still a long way to go before bubble values have fully deflated.