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Net long term migration slumped 44% to 1,050 in February from 1,860 in January on a seasonally adjusted basis as fewer foreign students and those with working visas arrived, while more non-New Zealand citizens left, Statistics NZ figures show. (Update 1 includes comments from Economist Jane Turner)

Actual net long term migration fell to 2,612 in February from 3,582 in February a year ago, while the trend measure of net migration fell to 1,480 in February from 1,600 in January. Net migration has been falling on a trend basis since it peaked at 1,980 in May last year as the number of New Zealanders leaving for Australia has picked up again in recent months and the number of foreigners migrating here has dipped.

Housing market watchers keep a close eye on net migration figures given its close connection to demand for housing, particularly in Auckland where many migrants arrive first. The turnaround in the net migration trend in late 2009 and early 2010 has combined with concerns about new property taxes in the May 20 budget and increases in interest rates to dampen activity and price growth in the housing markets through February and March.

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Auckland’s largest real estate agency group, Barfoot and Thompson, has reported sales volumes in February of 626, up 7.4 percent from January and up 12 percent from February a year ago. These are the first house sales figures reported for February and suggest a pickup in volume from a very weak January. (Update 1 includes chart).

Barfoot and Thompson’s average house price in February was NZ$521,323, up 3.2% from January and close to the average for 2009. Barfoot and Thompson Managing Director Peter Thompson said listing volumes surged to 1,714 in February, the highest in almost 2 years.

“Given the balanced state of the market sellers need to ensure their price right if they are to sell,” Thompson said.

See the release below:
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By Emma Geraghty

(Left) Elaine Lolesio and David Zussman

A  migration surge over the last year and a slump in new home building in Auckland is forcing many residents in New Zealand’s biggest city into garages and onto couches in the already overcrowded homes of friends and families,  say social policy experts.

Almost 7 new migrants arrived in Greater Auckland last year for every one new house built, double the ratio in the previous year, while the ratio in Manukau hit 14 new migrants for every one new home.

Housing remains unaffordable for many poorer Aucklanders and they are unable to pay the higher rents many landlords want to charge. The end result is more people crowding into fewer homes, according to the Salvation Army and the Mangere based housing charity Monte Cecilia.

“More and more migrants are fluctuating into Auckland for employment opportunities, putting housing stress on both the private and publics sectors,” Monte Cecilia housing manager Elaine Lolesio told interest.co.nz.

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Home loan approvals worth NZ$710.5 million were granted by banks in the week to February 19, which was down 25% from the equivalent week a year ago, Reserve Bank data shows.

Approvals in the 13 weeks to February 19 were down 12.6% from the same period a year ago, which was an acceleration in the fall from the 8.7% decline seen for the 13 weeks to February 12, the data shows.

This data suggests banks are being more cautious about lending to home buyers and/or home buyers are being more cautious about buying. The Mexican Standoff in the housing market is solidly in place as listings rise sharply while sales volumes are down sharply.

Banks face growing international regulatory restrictions on their ability to leverage shareholder capital and a tightening of Reserve Bank rules on their ability to find cheap short term funds offshore.

The ASB Housing Confidence Survey for the three months to January has found the resurgence of housing confidence last year has abated slightly in 2010 as investors focused on the upcoming increase in the Reserve Bank’s Official Cash Rate and uncertainty over property taxes.

“Despite some reduction in the favourable tailwinds for property, house price expectations remained firm over the quarter,” ASB said. The survey found 50% of those surveyed believed now was a good time to buy property, down from 59% previously.

The survey found awareness about  the RBNZ’s  ”middle of the year” timing for a hike in the Official Cash Rate and uncertainty around tax policy changes was likely to weigh on the house market until details were announced in the May 20 Budget.

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SBS Bank has raised its one year mortgage rate from 6.25% to 6.35%, and its two year rate from 7.25% to 7.30%. The move follows Westpac, which raised its one year rate to 6.29% earlier in the week.

See and compare all mortgage rates here.

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