Net departures to Aus at 30yr high

Net permanent departures from NZ to Aus hit 30 year high of 3,147 in June month on back of Chch exodus, Stats NZ says

21st Jul 11, 10:57am by Alex Tarrant

The net number of people leaving New Zealand permanently for Australia was 3,147 in June, the highest net outflow for a June month since 1981, figures released by Statistics New Zealand show.

Numbers of people leaving Christchurch, mainly for Australia, remained above average in June, following the February 22 earthquake that devastated much of the city’s central business district and left upwards of 10,000 homes needing to be demolished. This exodus has contributed to the trend of permanent migration to New Zealand turning negative since the quake.

Permanent departures of Christchurch residents numbered 600 in June, up from 500 in June 2010, Statistics New Zealand said. Permanent arrivals to Christchurch fell from 500 to 300 over the same period, while permanent departures from Christchurch between March and May 2011 were almost double those in the same months of 2010.

The net figure of 3,147 departures to Australia in June 2011 consisted of 832 arrivals to New Zealand, down from 1,093 in June 2010, and 3,979 departures, up from 2,923 a year ago. The vast majority of arrivals and departures were NZ citizens.

Meanwhile, seasonally adjusted figures show there was a net outflow of 340 people from New Zealand to live overseas for a year or more in June, the fourth consecutive month this occurred. Statistics New Zealand’s net migration trend, which is based on the seasonally adjusted figures, turned negative in April, falling to 350 departures in June.

On an unadjusted basis, a net 1,491 people left New Zealand permanently in June, double the net exodus in the same month a year ago.

Annual figures show New Zealand had a net permanent migration gain of 3,867 in the year to June 2011, the lowest for any year since the year to December 2008.

This compared to a net gain of 16,504 permanent migrants to New Zealand in the year to June 2010.

(Updates with chart)

Net long term migration

Select chart tabs

Source: Statistics NZ

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34 Comments

by goNZ | 21st Jul 11, 11:06am 1311203166

At least this is helping keep unemployment down in NZ - so thanks Australia.

But this outflow is becoming what Don Brash referred to once as NZs "tipping point"

What can we do about it ? bring in a CGT and expand WFF, that will keep 'em leaving - NOT

by Malarkey | 21st Jul 11, 2:05pm 1311213923

The best plan is to make tertiary education completely unaffordable. That way anyone who wants a useful education will be forced to head overseas (if they can afford the air fare), leaving just the panelbeaters and shelf stockers at The Warehouse. I look forward to the day when all conversations in NZ are centred on Ford vs Holden and who won Celebrity Treasure Island Dancing With The Stars Idol. Oh wait...

by JB | 21st Jul 11, 4:48pm 1311223694

Malarky ... don't forget the importance of recent headlines " Lady Gaga falls off a flaming piano " ... made the front page !

by steven | 22nd Jul 11, 7:18am 1311275913

Well what happened to Natioanl's plan?

oh wait they never had one.....

Brash's? give tax breaks to the rich which will keep housing expensive....so taht wont work either....

Simple there are better salaries across the ditch....

regards

by Houses Overpriced | 21st Jul 11, 11:18am 1311203908

buts thats just 100 more from chch that left than a year ago, so the rest that left were from which city?

by FCM | 21st Jul 11, 11:22am 1311204123

My friend at NZ customs CHC said they are getting at least 25-30 families a week leaving for OZ now. Once the money from the red zones starts to flow through they are expecting that number to double and are preparing for it.

by SK | 21st Jul 11, 11:27am 1311204458

Annual figures show New Zealand had a net permanent migration gain of 3,867 in the year to June 2011.

by Nicholas Arrand | 21st Jul 11, 11:35am 1311204933

"...compared to a net gain of 16,504 permanent migrants to New Zealand in the year to June 2010" So, down 77%, SK!

by FirstHomeBuyer | 21st Jul 11, 11:36am 1311204969

Net inflow of permanent and long-term migrants down 76% from the same period last year

by Houses Overpriced | 21st Jul 11, 11:35am 1311204903

guess you noted that its been decreasing last 4 month?

by SK | 21st Jul 11, 11:57am 1311206243

It's a net gain.

People are arriving in greater numbers than they are leaving.

This is what a net gain means.

by SK | 21st Jul 11, 11:59am 1311206367

ps FHM buyer - what is your jump in point for your purchase - I was wondering yesterday.

by goNZ | 21st Jul 11, 12:04pm 1311206668

Latest Poll narrows -Nats down 3% to 49 and Labour up 3 to 33 - Billenglish told me a few years ago that the kiwis leaving for Oz were largely Nat voters. Goff could still cobble together the numbers to win...

by Chris_J | 21st Jul 11, 12:07pm 1311206876

Just on your comments Alex, "upwards of 10,000 homes".

How is it that now it is clear something upwards of 30,000 dwellings are going to be uneconomic to repair and need demolished, that none of the media have even asked the Government the very question which seemed so important immediately after Feb 22 - How many houses need demolished?

(Don't bother asking EQC or insurers how many it is because they have no idea. We've had properties in the rapid assessments, assessed as minor structural damage that turned out to be demolish only once a full assessment was done).

Also the rest of the country may not be aware, but the CBD isn't just cordoned off, it is currently being slowly digested by large steel machines.

Any Christchurch local who has driven around Victoria St and Colombo St north is now well aware that it is not just old masonry buildings on the menu. Around Victoria St, already three 4-5 level 1980s/90s office blocks have gone. A large five level 1960s one was consumed some months ago. A four level 1990s is being prepared for crunching today. And dozens of 1-3 level 1950s-1990s buildings are already gone.

Along Colombo St north it's even worse. Only a handful of buildings remain and they are mostly cordoned awaiting demolition. There will be very little left standing in these areas once demolition is complete, and those that remain will mostly require major repair.

Construction is certainly going to be a major industry for some years to come. The only problem is that getting buildings built requires developers and investors. However with insurance nightmares and population exodus, capital flight is a far more attractive option than dealing with the current headaches.

by Chris_J | 21st Jul 11, 5:59pm 1311227982

Hugh, I think that it is widely accepted that the number will be around well over 20,000, and I suggest that it will likely be over 30,000. Whether all of those properties get demolished in the near term is another question though. Many may be repaired to a lower standard or simply used and occupied in their current (perhaps unlevel) state.

Obviously there are 5,000 plus red zone properties. Probably over half of the orange zone properties would need demolished even if all of the areas go green. So that's 12,000 plus before we even start thinking about the white zone on the hills, which probably has something like 3-5,000+ uneconomic to repair. Then we take a look at the green zones. The CBD area has lost a significant proportion of dwelling units. Most of the tower blocks are either coming down (The Establishment, Gallery Apartments, The Poplars, Victoria Apartments) or need total refurbishment and structural upgrades. Perhaps up to 5,000 units in the 4 aves will go including lots of leaky buildings that fortunately for the owners are wrecked. Down the east end of Salisbury, Peterborough etc it's nearly 100% of buildings that will end up going. Then in the rest of the Green zones we have areas like Charleston where in some streets it's 100% needing rebuilt. Then areas of Wainoni and Avonside where 100% of houses need demolished, parts of St Albans where it possibly averages 50%, then huge other areas such as Burwood, Aranui, Fendalton, Merivale, St Martins (the list is endless) where there are pockets up to 100% needing demolished.

Of course there are houses in seemingly unaffected suburbs like Bishopdale (Gardiners Road) and Redwood (Prestons Rd near Redwood School) that need demolished - not because of shaking damage but because of liquifaction.

So all up across the Green zone excluding the 4 aves I would guessimate the number to be 15,000. So that's well over 30,000 total.

There are many streets that you might think are perfectly fine but where the reality is most houses are being assessed as needing to be demolished.

When the figures start coming out for the number of overcap payments the truth of the scale of the damage will become clear.

Since Feb 22 we have had about 7 EQC assessments done - all for properties that will be overcap - so far we have received no paper work on any of the assessments after 4 months in some cases. So any number EQC give at present will be meaningless but my gut feeling is that there will be about 40,000 plus houses over the $115,000 cap.

Hugh, we don't actually need many new subdivisions, certainly not ones like some of the currently proposals on sites in Halswell and Marshlands, which had worse liquifaction and are boggier than many of the areas that are being abandoned.

In fact there will be so much vacant land becoming available in existing areas that it makes little sense rushing to put waste resources putting in subdivisions given the loss of population ChCh has/is already experiencing.

Remember submissions to CERA on how to fix Christchurch close 5pm tomorrow.

by Chris_J | 22nd Jul 11, 1:05am 1311253514

Hugh, the only way to have sections at $70,000 would be to have zero development contributions. Some may see that as a tax break for developers. It certainly would distort the market and penalise those that have paid DCs on their already developed sites.

DCs are around $25k per lot at present.

There currently are lots in outer areas from around $99k for 2500m2 (selling well below original prices developed 5+ years ago) in Amberley in new upmarket subdivisions, from about $110k for 700m2 (average in development $130k) in Rolleston. From about $130k (below original sale prices) for smaller sites at Pegasus. From about $130k for 500m2 in new subdivisions in Linwood (below cost on behalf of the receiver).

To have developments on the fringe of ChCh at $70k would be difficult given raw land prices are rarely below $250k per hectare (unless you jump some distance from the city boundaries or are on the fringes of Rolleston, Rangiora, Kaiapoi, Lincoln etc) which for normal sized sections would equate to about $20k raw land cost. I would be surprised if the necessary works and associated costs could be kept under $45k per lot (this certainly won't be a high quality development), so that would make $65k plus $25k DCs gives $90k plus margin, holding costs and selling fees. So an average price of $120k per lot with those DCs and raw land cost would be the minimum I could forsee.

Of course at that kind of price it may be cheaper to buy a site in the city suburbs which is available due to an EQ damaged property being demolished. Already I've seen a very good front 1050m2 (3 unit L2 site) sell at about $225k (fully fenced with high quality landscaping near new large garages, electric gates - just missing the house thanks to the EQ (no land damage at all)). Others are coming on the market at pretty competitive prices which represent very good value.

Now on the Prestons Road issue. The main area of liquifaction there was down near Redwood School at the Main North Road end (clearly visible).

Shaking in that part of town only got to about 30% of gravity in any of the events where as Avondale etc got to 80% or so in Feb and June.

Of note there was also liquifaction at Northwood, Regents Park and Main North Road near the Kapautone Stream (which is ironically right by the SCF owned Belfast Park Ltd land recently rezoned).

Now the Prestons development is on land claimed to be ok. Of course this land extends to Lower Styx and Turners Rds where (if you go out and have a look) there is significant lateral movement including a 50-100mm crack along the road outside the rezoned land. Only a few hundred metres up the road there is significant liquifaction from June lying in paddocks, the road is also buckled. This is from an event which only produced shaking in the area around the 25% of gravity and caused no further damage just up the road at Brooklands.

The sandy terrain through the Prestons block is very similar to Parklands which experienced greater shaking and is now entirely zoned orange after widespread liquifaction.

There must be the consideration that the building of dwellings on the worst hit areas actually magnified the problem with the weight of dwellings forcing more liquifaction and more sand to be ejected.

Moreover the very existence of large deposits of sands at Prestons should raise concerns. It has always been considered that the sands in those areas are wind blown deposits. However the concern must be what if those areas are actually places where significant liquifaction has occured in relatively recent times (over the past few thousand years), it's certainly something worth investigating.

So should regular construction occur in this area. I think not. Indeed most areas around ChCh and many other parts of the country, piled foundations and rib raft slabs should be the norm, even on "solid" ground.

There is a high chance that a continuation of the Hikurangi Trench tracks up the Canterbury Plains roughly following the Waimakariri River. That would explain the rather rapid movement in the path of the Waimak from flowing into Lake Ellesmere not that long ago to flowing into the Avon/Heathcote system, to the Styx and most recently usurping the lower reaches of the Eyre and Kaiapoi River systems.

Uplift on the southern portion of the Canterbury Plains, would explain the wanderings of the Waimak and possibly the phenomena that is Gorge Hill at the Waimak Gorge bridge.

So what does that mean? I think it means that we should be cautious and given that there were significant earthquakes centred around Banks Peninsula in 1869 and 1870 along with many other nearby quakes such as Castle Hill in 1881 and even Amuri in 1888, we should build in a way that where the buildings are survivable and fit for reuse after even major events. Remember if the house can stay level liquifaction is not that different to a flood. So planning to allow areas for runoff. Less asphalt surfaces. Services located under grassed areas. Elevated house sites. Most importantly piled foundations. And if you are really cautious, houses that can be easily and cheaply levelled and no masonry veneers.

Solutions are out there but going back to business as usual on sites like Prestons may look very silly in the future.

(Remember there is a fault running through town out to Waimari Beach that has produced several high 4's and low 5's but nothing big yet. There is also one off the coast at the Waimak mouth that produced something like a 5.7 in the late 80s, this fault has been quiet so far this past year).

by Chris_J | 22nd Jul 11, 1:31pm 1311298294

Just a very quick reply for now, but...

Anything under $100k/ha on the fringe is unlikely as a raw land price, because hundreds of people would simply be lining up to buy say 2ha (essentially unserviced) blocks. Actually if mass amounts of land were rezoned much could end up as say 1 ha blocks serviced only by existing roads and gravel driveways with onsite septic and water tanks.

Given that market value around Avonhead, Harewood and even Halswell is currently something like $600k plus for a 4ha vacant block discontinuous from existing residential areas. (Indeed the last one sold in Highsted Rd was about $700k for a vacant 2ha block I believe).

On development costs, I can't believe you could do a normal subdivision for $30k per lot. Not unless you had a fully serviced street running by and were only putting a few lanes off it.

I know a development in Dunedin (Dunedin has essentially no DCs) where the infrastructure alone was $80k per lot for stage 1 of about a 100 lot development (40 odd lots in stage 1). Total costs were actually nearly 100% of the $120-140 sales prices. The developer was hoping for profit on the 2nd stage which would have had slightly lower costs.

To be honest $30k per lot was the type of figures developers would work on back in the early 90s. I doubt anything could really be done at that level today.

by Chris_J | 22nd Jul 11, 6:39pm 1311316749

Although the raw land cost is probably not a huge component of the final land cost, getting this figure below say the $20k I suggest could only be done if large tracts of land distant from current urban areas were developed.

The fact is that 5 acres (2ha) in Harewood is far more desirable than a 1000m2 section in Northwood.

Say in an alternate reality if someone was looking to say spend $500,000 on building costs for their new home, and 1000m2 in quality suburbs (say equivalent to Hampton Grange in Northwood) were $90,000 (ie a 1/3 the current price), but 1ha just up Hussey Rd was just $195,000, then I don't think there would be much of a market for houses in the subdivision. ($590k in the subdivision versus $695,000 on the 2.5 acres)

One example of 1ha subdivisions would be the 1990s Hawthorne Park subvision in Sparks Road Hoon Hay. Because of boggy ground the larger minimum size was required. Today those houses sell at around the $800-1.2million while similar houses on small sites sell for maybe $450-650k in that area, so the added value of the large sites is clearly seen.

You will be aware that blocks like the one United Fisheries paid about $11m for in 2007 in Styx Mill Rd are up about the $250k/ha for the usable land on the site (fronts the Styx River) this was for land still zoned rural (and still unlikely to be rezoned unless CERA go nuts).

So in all, prices of raw land are unlikely to fall significantly and rezoning large tracts may even make it more expensive as it could encourage smaller lots which in the current market 1ha in say Harewood would easily fetch $400,000, making it easier to sell the sites as more cheaply developed lifestyle blocks.

So to make it viable to say get a 1000m2 section at $110k, working backwards, the developer needs a margin and to cover holding costs and selling fees, so that gives a maximum cost of $85,000, deduct costs which I feel would be $50,000 to present a development on bare land to the standard of say Hampton Grange so that's $35,000 left. Take off development contributions, that's $10,000 raw land cost. At 7.5 1000m2 per ha (rest for roads and reserves) that requires a raw land cost of just $75,000 per hectare.. oh dear.

So if people are prepared to pay $400,000 for a 1 hectare block, they would need to pay something around $160,000 for a 1000m2 to make developing them viable.

The likelihood in all this, is that you can't create $70,000 sections on the outskirts of the city unless you are talking about some distance out where land is much more plentiful and the ownership less fragmented but then development costs will be higher.

It is possible to get sections in peripheral areas at low $100s near Rolleston, Templeton, Rangiora etc but trying to do that in say Harewood is not possible.

With lower DCs it may be possible to get sections in the lower mid $100s in Yaldhurst and Halswell but that is about as cheap as I could see things going.

Remeber also that developments such as Aidanfield are not exactly small scale with hundreds of sections going in, in each stage. If on that economy of scale the lowest average price acheivable is $190k+. Then I don't hold much hope for $50k or even $70k sections.

by Chris_J | 23rd Jul 11, 7:24pm 1311405888

Hugh, I just learned today that a 1960s house just 2 properties from the "Prestons" rezoning is a total write off due to subsidence.

Is this just the next "leaky homes" scandal as we get a rebuilt city that will just inevitably fail again?

Some real leadership is needed.

by Kate | 21st Jul 11, 10:00pm 1311242405

Certainly from the outside, I had assumed that green implied little structural damage - whereas reading this it's only just dawned on me that green means ground okayed to rebuild. I hadn't considered that many houses in these areas might also end up demolished and the empty sections might then come up for sale.

It's deplorable that dealing with the inept response from the bureaucracy is likely to be driving away as many people as the actual trauma of the event and personal hardship.

I can't help but wonder whether Helen Clark's more 'iron lady' type leadership style would have been better in this type of natural disaster.

by FCM | 21st Jul 11, 1:22pm 1311211323

Yeap there will be a cross roads, as the reinsurance costs will/are sky rocket (ing), so a business will need to look at it's operating costs and risk, and CHC will seem to high on both accounts. So it ALL starts with jobs, no job's , no need for huge residential developments, yes the redevelopment will create jobs, but no developer will invest unless he knows it can be occupied, the amount of red tape will put many off, and the re build may really grind to a halt before it has even began.

by David B | 21st Jul 11, 12:42pm 1311208961

Why would anybody want to go to Australia when it's about to go into recession?

by Matt in Auck | 21st Jul 11, 12:50pm 1311209442

David - do you think NZ is much better? - I don't

And do you not think any recession will Aus will not also affect NZ? Nz is very reliant on the Aus economy

And do you believe that the NZ economy is now on an unrelenting upwards trajectory? Do you not think that the rapidly strengthening NZ dollar at some point is going to push back our economy, given we are heavily reliant on tourism and exporting?

Moving to Aus? Its horses for courses. The position I have found there, I believe, is fairly robust and secure. Some positons there won't be. The same is true in NZ.

Opporunities have to be judged on a case by case. Moving to Aus is certainly not necessarily automatically the best option.

by David B | 21st Jul 11, 1:30pm 1311211818

Well I am a New Zealander so I probably have a biased opinion I suppose. Although things are finely balanced at the moment, my sense nevertheless is that NZ has turned the corner on its current economic woes and the future is looking much more positive. Yes, Australia is our largest trading partner for sure, but it's not our only one. And much of its economic resilient in recent times has been due to its trade with China. So in that respect we have been lucky as we have been trading with China both directly and indirectly.

Yes China is slowing, but it's not stopping.

Our biggest difference with Australia is also our biggest strength at the present time. Australia digs up dirt and exports it while we grow grass and trees in ours. A slowing China will impact upon the demand for Australian minerals, but hungry mouths still need to be fed. The future for us as a food producer therefore remains positive in spite of the state of industrial output around the world. If you strip out the mining data from the Australian economy, it’s actually not looking too good, and it hasn’t been for some time. So in my view that already apparent weakness in the industrial and consumer sectors in Australia means that even if it goes into recession, I think its impact on New Zealand will be somewhat limited.

But we’ll see.

by Nicholas Arrand | 21st Jul 11, 1:46pm 1311212790

Australia's banks, are, by and large,...our banks, David B. That is the umbilical cord that we cannot detach from. It doesn't matter what we do or don't dig up/grow/mow or harvest, if the finaciers decide that they need to raise money by hiking margins/restricting loans here, to help 'back home'.

by Matt in Auck | 21st Jul 11, 2:43pm 1311216198

I agree to some extent, but I think you are underestimating the reliance of the NZ economy on Aus. You make a good point about the fact that demand for food may well be more resilient than demand for minerals. Yet at the same time I think much of the NZ domestic economy is somewhat divorced from the benefits accrued from food exporting. Indeed I would argue that the shallowness of the NZ domestic economy is really being shown up. I think it is quite clear that the NZ domestic economy was strong during the 2001- 2007 period almost solely due to the housing boom.

End of the day, I don't think the relative performance of NZ and Aus will differ too much in the next couple of years

by David B | 21st Jul 11, 3:34pm 1311219288

Well one of the interesting things wrt to our reliance on Australia, and I agree with you that too many of our trade eggs are in the Australian basket, but I think what we really have is too great a psychological reliance on Australia for our trade. But the good news is that that does not extend to our primary produce and commodities, but only to our manufacturing and tourism sectors. Lucky us, given the dark clouds that are gathering over Oz, that we still get75% of our trade from elsewhere.

But there is a problem. Australia is actually a small country. People forget that. They confuse its geographical size with the size of its population. It actually has a small population not much bigger than the population of metropolitan Seoul, New York, Mumbai, Jakarta or Mexico City, and a GDP similar to that of Texas of the state of New York. Trying to develop a strong manufacturing and service based industry in New Zealand by just relying on trade with Australia is just not going to cut the mustard I'm afraid.

If the manufacturing/service sector here in NZ would only take a leaf out of the farming/ rural sectors that have never relied on Australia for their trade, growth and profits, we would have that deeper economy that you and I would both like to see.

by Ralph | 21st Jul 11, 6:27pm 1311229622

"Moving to Aus is certainly not necessarily automatically the best option."

Quite, Sydney is a dump.

by Elley | 21st Jul 11, 1:01pm 1311210091

You forgot the snakes, spiders etc. Definitely scarier than recession to me :)

by Matt in Auck | 21st Jul 11, 12:44pm 1311209087

terrible result for the housing spruikers. Continued emmigration is going to negate any potential house price pressure resulting from limited construction

by Matt in Auck | 21st Jul 11, 5:37pm 1311226661

hold on, in opposition and in the last election didn't the Nats use the high emmigration of kiwis to Aus as a key point upon which to attack Labour?

Here we are with the biggest outflows to Aus since 1981.

National need to be taken to task on this

by DC | 21st Jul 11, 7:36pm 1311233775

Watching the exodus from here in the UK and wanting to return to NZ later this year makes me go hmmm! Maybe I should try oz? Half of my friends are there.

by Matt in Auck | 21st Jul 11, 10:13pm 1311243212

horses for courses Dc. As I said earlier, each person must make a considered decision on the merits of their own circumstances and opportunities. For me, opportunities looked better, and work more secure, in Aus rather than NZ, over the next couple of years.

by Simon | 22nd Jul 11, 5:01am 1311267696

Negative migration; yet we are still building houses...

if this trend continues we will have a serious over supply of houses in NZ;

Empty houses bringing no rental income, that are too rough for any first home buyers to want as they get to pick from the many properties that are getting abandoned by the NZers fleeing to aussy.