Gareth Morgan says the data is clear on migration and house prices. But he says it is the numbers coming from the UK that are the biggest influence

Fair point from Gareth.

Doesn't matter where the immigration comes from.  It's the number that influence house prices.

My view we need to control that number for our benefit.  And I see a disadvantage to us in the current volumes.

Looking at volume of local FX transactions (which also follow migration and house prices) they have been fairly steady the past few months, suggesting that if it is the money people bring rather than the people, it might not get the boost indicated by the raw migration figures.

At least GM has a pointer to the problem.

Notwithstanding his information there is the pressure of investor v FTB.

Here I would suggest that there is an upward influence from:

1. Locals using their equity to take advantage of low interest money to bid higher than the FTBs

2. In Auckland the cashed up Asiatics who may have a language deficit in relation to jobs or business activity use rentals as a means of earning some income.

3. There are foreign buyers who find NZ  (again Auckland in particular) who are able and willing to overbid locals.

Add this to GMs mix and the answer is getting closer than John Key ever will to the solution. And it ain't just supply. It is misdirected demand as well. 

Thank you Gareth , I was hammered by the Chattering Class this morning on this site where I dared to mention that Migration since 1991 was the cause of house price increases and that we could not blame John Key 

Then there is the real world.

It's not the ethnicity, or the country of origin, or where they originate from

It's the ones with the MONEY, money that often has no provenance

But cashed-up immigrant under-bidders with money do play a very significant role

They push up the price

If you had a house in a desirable location worth $2 million, and

If you held an auction with 10 very willing bidders in attendance, all willing to buy, where

7 of the attendees were Kazahkstanis with $2 miilion each, and

2 of the attendees were Innuit Eskimo Indians from Canada with $2.1 million each, and

1 was a local Methamphetamine drug kingpin with $3 million in his pocket

I can tell you now who the successful buyer will be, and "he/she" will pay at least $2.2 million to get it, might even go $2.5 million to knock the others out of contention

AND if you take away the 9 under-bidders, and if there was no reserve, he/she would definitely be able to buy it for a lot less

So, the real question is, which single group is coming in with all the money? Not sure it's UK'ers

Gareth's graph suggests it's a good time to buy property.

http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11257808

He and his family are MY kind of immigrant

Great story and exactly what we expect to happen again this time.  Immigrants starting uinversity (both him and his wife, with son later down the line) in a provincial town that they prefer over auckland.  "easy to get around in" just drive from door to door, anywhere in 10 mins.

Further to Iconoclast's comment it is important to identify where each group is largely ending up in NZ. Is it Asians - AKL/ N Shore, Saffers N Shore, Poms - where do they go - is it all over NZ with their possible dairy background, Indians ??? Students - are they evenly distributed around all the universities or just focussed on AKL?

For a moment I thought Gareth was going to suggest killing UK migrants to stop them affecting the local economy.

However the points are correct with a few additions. I emigrated from the UK several years ago and was taken in by the land of milk and honey I was told about at all the seminars and in the wealth (pardon the pun) of information thrown at you in websites and brochures. 

On arriving here with over 20 years experience in financila services I was fortunate to get a job that the company had been trying to fill for over 6 months. However I was not able to live my dream of being mortgage free and having a half acre section.

I have a far larger mortgage than I ever would have had in the UK, am probably poorer than I've been but can categorically say I'm also happier and will never return.

Raegun makes a good point also, this country needs hard working people that want nothing more than to better themselves and can in the course of doing so benefit this country greatly.

What needs to happen is assurance that those coming if they do not speak English can/will learn to do so, and in return we should ensure locals also learn a second language - I have seen first hand the arrogant British apporach of talking louder and slower in a foreign country and rolling eyes because a Chinese local doesn't speak English.

Property here is far too overvalued, and everyone knows it, but no-one will tackle it head on and with only  a 3 year election cycle it would be policitical suicide.

I had an Uncle who went to the U.K during WW2 and stayed. He returned with two sons their wives and some offspring.

We’re all familiar with the stories of Russian oligarchs buying up mansions in London, but this is a much broader phenomenon. A torrent of capital from wealthy people in emerging markets—from China, above all, but also from Latin America, Russia, and the Middle East—has flowed into the real-estate markets of big cities in other countries, driving up prices and causing a luxury-construction boom. A recent report by Sotheby’s International Realty Canada examined more than twelve hundred luxury-home sales in Vancouver in the first half of 2013 and found that foreign buyers accounted for nearly half of sales. In Miami, a huge influx of money from Latin America has enabled the city’s housing market to recover from the bursting of the housing bubble, and has set off a condo-construction spree. Australia has become a prime market for Chinese investors, who Credit Suisse estimates will buy forty-four billion dollars’ worth of real estate there in the next seven years.

What’s so special about the places that attract all this foreign money? The economists Joseph Gyourko, Christopher Mayer, and Todd Sinai have developed a theory about what they call “superstar cities.” Looking at data from 1950 to 2000, they found a small number of cities where housing prices rose steeply, and concluded that high earners tended to cluster together over time, with the result that rich cities tend to get richer.

Vancouver isn’t an obvious superstar. It’s not home to a major industry—as New York and London are to finance, or San Francisco to tech—and it doesn’t have the cultural cachet of Paris or Milan. Instead, Vancouver’s appeal consists of comfort and security, making it what Andy Yan calls a “hedge city.” “What hedge cities offer is social and political stability, and, in the case of Vancouver, it also offers long-term protection against climate change,” he said. “There are now rich people around the world who are looking for places where they can park some of their cash and feel safe about it.” A recent paper by two Oxford economists bears this out, showing a tight correlation between London house prices and turmoil in southern and Eastern Europe. The real-estate boom in Miami has been magnified by political unrest in Venezuela. And Vancouver, which has a large Chinese population, easy access to the Pacific Rim, and nice weather, has become a magnet for Chinese investors looking for insurance against uncertainty. A Conference Board of Canada report found that Vancouver’s real-estate market is tightly connected to what happens in the Chinese economy.