Westpac report says migration is already slowing and this will 'reinforce downward pressure on house prices'

Westpac report says migration is already slowing and this will 'reinforce downward pressure on house prices'

A report by Westpac says net population growth from migration will drop from over 70,000 a year currently to around 10,000 a year by 2021, which will reinforce downward pressure on house prices.

Entitled They came, they saw, they're leaving, the report by Westpac senior economist Satish Ranchhod says a downturn in migration was underway even before the new Labour-led government is able to tighten migration settings.

"And expected policy changes will reinforce recent trends," Ranchhod says.

"We expect lower net migration will see population growth slow from over 2.1% per annum to 0.8% by 2021."

Ranchhod says this will have some significant impacts on the economy.

"First, it will remove an easy source of demand growth that businesses have enjoyed in recent years.

"It's much easier to increase revenues in an environment where the population is expanding rapidly," he says.

And the housing market will be particularly affected.

"Lower migration is one of several upcoming policy changes that we expect will result in very weak house price inflation over the coming years," the report says.

"The fall in migration will also reduce the upwards pressure on rents.

"In terms of construction, going forward we won't see the same sort of large increases in demand that we have in recent years.

"In Auckland, demand for housing will remain strong.

"However, it will be a very different story in many other regions that aren't wrestling with significant shortages of housing.

"In fact, in some regions, slower population growth could mean that construction levels fall over the coming years," Ranchhod says.

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waiting for this months headline, migration hits an all time high

Don't mind if it impacts house prices but I'd be concerned if rents decreased.


It’s Westpac so whatever they say it will turn out the opposite
These guys n gals have made some poor predictions in the past
How can anyone predict 2021 ? There might be WW3 starting with Trump

Whatever happened to John Key's claim that our record migration run means everyone wants to hang out with the winners.

"That signals a huge reduction in the economy’s rate of potential GDP growth and is a key reason
why we expect lower GDP growth over time"

Which is why mortgage rates ( and wage increases!) are going to 'zero'!

From Notes at the end of the Report:
" ¹ Other policy changes that will affect house prices include the extension of the ‘bright line’ test for taxing capital gains and the removal of the ability to write-off losses on rental properties against personal incomes"
Quite right!


Clearly the reason why the National folks kept the migration taps open... just to prop up house prices

dream on. Its more to do with keeping the crown accounts healthy, and growing. The 3 ring circus will find out pretty quickly that their forecasts look way off the mark when they see tax revenue falling at a rate of knots. totally predictable.

...if that was the reason.....then its not a reason.

looks like you're still dreaming of the National loss

I couldn’t care who governs, so long as they’re competent.

The jury is still out with this lot as they have back flipped on just about every policy plank they electioned on.

Like most folk I think the state of our housing market is a mess.however I don’t subscribe to the view that we should cut immigration because it’s the route of all evil either.

So you advocate completely overwhelming our vital services such as housing and its infrastructure, health and education.

pouring $400m into offering free tertiary education when 95% could afford the fees anyway is right on the money eh Didge.

What else? Infrastructure. Oh yeah lets build a tram to the airport. That makes perfect sense when you're trying to get mum, dad and kids on with all your luggage. Genius

More silly statements.

What’s so silly about those statements? Silly is giving fee free education to a household (mine) with an income over $250,000.

Silly because it has NOTHING to do with overwhelming our infrastructure.

Sometimes the truth hurts

Immigration is like many things: great in moderation but bad in extreme. We have the highest legal immigration in the world and infrastructure is creaking badly and those in low-paid jobs are suffering. The wealthy (property owners) are getting wealthier but the poor are being kicked in the face. If all the immigrants were truly highly skilled it would be OK - not just a temporary boost for the government tax income. No immigration and you get North Korea or Afghanistan.

No immigration and you get a very stable predictable lifestyle. No volatility. Cities develop their needed infrastructure. Housing is predictable and prices settle to true value. The wealth gap between rich and poor closes up. Less opportunity for risk takers. The lifestyle becomes conservative and for some a bit boring.

Migration doesn't mean Chinese. Please be clear about this.


It pretty much does.


You're right DG it's all Indian students running corner dairies on "business displomas".


You mean "retail specialists" filling our skill gap!

I can foresee a shortage of uber drivers

Migration doesn't mean Chinese or Indian - it is only polite to apply it to your own origins (my family is UK & Melanesian). No problem with a few more of either POMs or PIs nor more Chinese, Indians, Africans, etc so long as we are talking a gentle sprinkling like a refreshing shower of rain not a bloody flood.

Dear lord, what would people say if there was an ethnically Asian UK citizen, (quite common in the UK, US, Aus, Europe in fact in most corners of the globe). The reverse would blow the minds then an ethnically British Indian citizen. The ethnicity is not the relevant factor, the citizenship, skills, visa purpose/status, refugee status, medical status, financial status, criminal status and related family are relevant in immigration success. Even then regardless of all those the number inward is too high for infrastructure and the economy to weather it long term. It is a ponzi scheme with us all going down. Those most vulnerable taking the hits first. It is life and death to many and unfortunately many have died already due to the levels of service degradation and resource stress. The longer it continues the more serious the effects on wider proportions of our society, (which includes those migrated from a long time ago to those more recent). I wish gene testing to show wide migration and genetic group mixing was done in schools so that we can recognise that all pasts are mixed and it then becomes a resource and infrastructure management discussion, (which is the issue with high migration currently, not what culture people identify as).

Blah blah blah, heard it all before. I look forward to creaming it here in Wellington while this mug keeps working for a living.


I thought you property investors did work -- apart from, you know, God's work. So are you or aren't you in business then? Something you missed declaring to IRD about your status, or just a slip of the tongue?


It surely is time for a Property Republic. One may also question the arrogant use of grandiose titles such as Property king, Property Leader, and The MAN etc by those that have brought our economy to such an unstable situation.

Yep, that 3% yield sure does stack up quick. You must be like a Pablo Escobar, I don’t know WHAT you would do with all that money.

If Wellington becomes overrun with feral hippos, I know who I'll suspect.

Ha ha, nice one


Property King, please do be considerate

Do you maintain a zoo with exotic animals? If not, you should seriously consider it.

Now now don’t be envious. I know you feel upset that you went to the races and backed the wrong horse. Then you turn on those who won and the cause of all of your difficulties is that old age evil bugger, ‘they’.

Well, you had made the comment you were “creaming it”, we made the comment 3% yield doesn’t seem v “creamy”, in fact it seems pretty poor, but up to you

Any good property investor knows how to create an 8-10% yield without much effort. It is those who can’t think creatively that quote stats, never get in and miss out.

I see, so market rate of yield is 3% and yours is 8-10%. Is it your choice of curtains? Or the carpet? You should do a TV show. You have a special gift

I can clearly see why only a few of us get rich.

Well, only a few of us actually make sense. Not sure that you're one of them. You say you are achieving yields that are 200-300% in excsss of the market average. Sounds a bit delusional, but that's fine, takes all sorts on this forum

Thank god the vast majority of people think like you. Otherwise getting rich would be so much harder.

You could show Bobster hes wrong by saying how you do it. But until than its just words on an internet forum. Those words backed up against current market conditions people will draw conclusions.

If you can make 8-10% you could actually scale your business model and go worldwide, ask people for subscriptions and guarantee their money.

Then you could be a gobal player.

Alternatively if it is that easy maybe you can just borrow hundreds of millions as your guaranteed to make profits and its absolutely no risk whatsoever. Easy money.

No need. It’s all about the curtains....definitely

8% is easily achievable in Christchurch for older multi- tenancies. I'm looking at a 10% one now, a few fish hooks but once they're sorted it's a good property. Strong positive cashflow from day one so ringfenced losses will not affect it.

Bobster, while I despise PK's arrogance, he makes a valid point. No serious poperty investor would buy the average house returning an average yield and paying the market price. I would never buy a house if I cannot get an immediate 20% improvement in capital value and I do not expect the property market to "lift" in order to make a profit (the increase of value over time is simply a bonus). I look at 100 properties and if I can't find one that provides upside... I keep looking

Who’s the Queen then ?

P K, you're doing a stellar job at feeding the existing anti-investor sentiment of many on this site and giving a bad name to investors and landlords. Not very cool at all


But I was told immigration has nothing to do with house prices. Nick Smith told me it was a supply problem and he was doing to build some nice warm dwelling consents.


Excellent news.

“The Man” is the man!
Grandiose name not sure of that, but extremely accurate.
And yes, landlords in general are doing a great thing for NZ in providing good shelter for those that don’t wish to buy!
Being s professional landlord is not always beer and skittles but it certainly is far better than having an 8 to 5 job and a way to financial stability.

The Man - You dont even own a mailbox ! LOL. LOL. LOL.

John, don’t call The Man a liar, the offer that Gordon hasn’t been up to is open for you now!!!

Ok you are a liar - you said you would no longer comment and were leaving after your spat with Gordon yet here you are. Can we take anything you say as being the truth.

Bad Robot, fair point but the negatives on here need educating and thT is whAt the property investors are trying to do.
Yes you can take what I say as gospel

Being a Landlord is 24/7/365 - if you've got tenants continuously. ( The effort might not be there, but the cost and the risk is)
8/5/250 at least given the employed, a break!

Exactly if running houses were as easy as these spruikers pretend I would still be doing it
There came a time I had all these houses & no time left for me
Sold the lot & got my life back
Property managers require watching also so there is no easy answer as a landlord plus it can be tedious
In the end you become sick of house repairs & tenants
I’m speaking of being a long term landlord not a speculator type

Question: How does westpac know that migration will fall to 10,000 three years ahead of time - are they the ones who issue the visas or employ migrants? ... Unless they know that this Gov will close the gates and shoot themselves in the foot with a RPG !!

I find it very hard to believe that anyone ( including Govs ) can predict matters for one year ahead related to the movement of people in this fluid and unstable world we live in today.

Our migration is diversified, and the ratios of Chinese, Indians, Filipinos, Poms, Aussies . SA, Americans, and expats change all the time..! So what on earth would make all this mix turn their back to NZ in such a short period of time ??

Logic suggests that this report is full of holes and lets out a lot of hot air ..

they could have one thing right, the pressure will be on Auckland ...obviously where most of the employment opportunities are and employers are crying for skills and workers. We didn't need Westpac or anyone to tell us that !

"what on earth would make all this mix turn their back to NZ in such a short period of time ??" ...the visas the Government issues, and Winston may just do a Donald and stick to his pledge ie: "10,000 a year, and that's it!". That, is what Westpac may forsee.....

Yes, agree that these types of predictions are not worth much.

I share your cynicism on this report.
I think immigration will drop, but not that significantly.
It's not like Aus is booming.

I think the "Indian Students, nudge, nudge, wink wink" will still try and come to round out their education, especially those from Dehli...

Very true, no one can really predict what will happen next year let alone 3 years later due to the many possible interconnected factors happening all around the world. For all I know they both these specialist and govt makes predictions by coin toss or looking into animal guts for signs. Best sack them all and just let whatever happens happen.

Impossible to fall to 10,000 when we have 13,000 visas per year issued to partners. Are we going to stop Kiwis marrying foreigners or prevent them living in NZ?

The article refers to NET migration. So the projection will be assuming lots of people continuing to LEAVE New Zealand but with the overall net positive annual figure to be 10k. There is no issue with the 13k partner visas at all. Way way more people leave NZ every year than this.

True, I noticed that after making my contribution. I tend to follow permanent resident visas (>45k) rather than the less reliable tracking what people put on their arrival & departure cards. To get to 10,000 net from 70,000 we require Australia to improve its economy and New Zealand to continue or accelerate its decline. I'm not too optimistic of the former and rather depressed by the later. Thanks for correcting me.

I find this prediction quiet extreme tbh and am asking myself what on earth informed this massive change in prediction from Westpac?

It's looking possible to me that both Australia and NZ economies could be entering the doldrums over the next few years, so in my mind, for these figures to be even remotely possible, immigration from Asia would have to go down massively, which I guess could happen in an NZ recession and maybe young Kiwi's would be heading to Europe/US (if their economies are actually recovering) in higher numbers? If NZ and OZ slow at the same time, Oz still might work out better for many so NZ could still lose out there.

Still, massive swing in a short period of time is an extreme prediction. Bit baffled by it tbh

I think it is more predicated on the anticipated drop in overseas student numbers (particularly relating to the PTE sector) - in addition to the proposed changes to the immigration points system which will no longer apply additional points to those obtaining a NZ qualification with respect to residency applications (i.e., no longer is study a path to residency).

Additionally, as I understand it, this government were also reversing out the changes National made to allow those studying to also work up to 30 hours a week while on a student visa (i.e., no longer is studying a path to casual employment).

So, regardless the clampdown on PTEs providing low-end or poor quality course offerings, there is no longer that incentive for students also seeking to work/earn while here to attend those NZ educational institutes that remain open.

I'm guessing also that many working visas were for business owners and/or workers in that PTE sector, and/or businesses that directly targeted services at that sector - and those numbers of working visa are also anticipated to decline.

So if the student visa numbers alone decline by say 30,000 - there could well be another 10,000 working visas that previously serviced that student sector, which would go with them.

Additionally, the RE sector looks to be in decline - likely a lot of working visas associated with that sector as well.


I got an example of how house values been going up.
A newly arrived landlord, take a 2bedroom attached unit/cross lease.
Board up the garage, it becomes a bedroom. At the back of the was garage raise the floor 18 inches, install a bath room (run the waste pipe on the outside eall, with the 18in drop to the existing waste pipe)
Crop the lawn area in half by paving and erect a car port (4 legged, unbraced that leads to & frou).

Call it a 3 bedroom, able to house up to six students!.
The Council know nothing, nothing!.

Add refinance with the bank. etc.

Someone, somewhere has to provide a valuation to the bank. The bank isn't dumb. They'll look at 'what it was' last time it transacted and will want an update if the configuration has changed before extending finance.Ah! I see..........that's what the upcoming Court case is about!

And most mortgage brokers would suggest a change of bank at this refinancing juncture!

Whats its called, when you know, its within the system?

Its a leafy suburb where it is, and the neighbours are spewing because, its a unit, down a shared drive way. So from a probable one, possible two cars. They are looking at and hearing 5 cars, maybe 6. With less drive/car space than before because the garage has gone bedroom.

Q: what could neighbours do, what could they do. Or does bad landlord drive out neat owner occupiers?

P.S. 1. building alterations done by landlord country of origin workmen. (No registered builder on site).

P.S. 2 Because the next door owner occupiers now have renters telling them, as renters, renters have rights too!

Council responds to building permit compliance complaints.
If you have a problem Henry-Tull with this set,
up notify the council in writing.

Dear Henry
Most garages in Auckland lost their cars years ago & became accommodation or rec rooms
The Skyline garage has also been a traditional form of accommodation for many across Auckland for decades now.
The good old days when it wasn’t so much this way were the 1960s when mums didn’t have paid employment.

When I was a broke apprentice new to Auckland I lived in a skyline garage early 80's.
It was colder inside than outside during a frost and like an oven on a summer day.
You dressed accordingly. You adjusted your lifestyle to suit.You had cheap rent that created other opportunities as it gave you some cash flow.
I valued having the choice. I didn't get sick. If I needed I would do it again but I would insulate if it was long term or my own property.

The Westpac Economists don't know where immigration will be in 2021. Down to 10'000 ? They could of course be right, or they could be wrong

Yes, agree. It's a guesstimate. I would give their assessments of historic data credence, but their projections of most things are more or less no better than yours or mine.

Shit i'll have to employ lazy Kiwi's now!!!

Yes you will have to pay a decent wage now....and even holiday pay

I think the time is fast approaching when switched on Landlords will compete on price to retain good tenants. Those that cannot accommodate this, WOF or the possibility of negative equity - sell.

It's also a given house prices are going to fall considerably. The only argument is by how quickly and by how much! FHB, wait and see how this all plays out - cheaper houses coming.

RP, have you a history of making correct predictions, or are you just another getting on the doomsday bandwagon, predicting drops in the Uckland prices that many have been on about for so many years?
Reality is that investors are just that and if they are any good the6 will have made enough in recent years to cover any drops.
Thing is though that they won’t bro ffloading good property anytime sooon.
Chch is certainly the place to invest in going forward.
Heard on the grapevine, that Gordon is thinking seriously about moving down to look for investment opportunities in Chch and Icould assist him if he was serious!

THE MAN 2, you needn't worry. If what you post is void of lies, you're a fair dinkum professional Landlord and self annointed financial advisor who lives in Christchurch where house prices are falling together with rents.

(sound of crickets)

Rp you are Gordon aren’t you?

Our rental prices are generally the same as last year except our commercial has gone up!

House prices are not dropping in Chch if you have a well maintained property.
No. Of sales are down but that is creating opportunities and Chch is getting more attractive by the week to the many that are making it their home.

THE MAN 2, hahaha! Nope I'm still not Gordon. May I suggest you venture to Westfield Riccarton, repeatedly yell "GORDON!" and eventually he will come.

Rp, Gordon doesn’t live in Chch yet, however I am sure he would love to!

Hi R-P,

For goodness sake, landlords have always competed on price to retain good tenants.

In fact, there is documented (archived) evidence of English landlords having competed on price as far back as the 17th century to attract tenants "of good word".

R-P - time you were dragged kicking and squealing into the middle ages. You are literally centuries behind the rest of us.


TTP, yes sure! Google is rich with information where Landlords might have had to discount rents to keep good tenants, like 1930s for starters. Or London today here:


You missed the bit where there is also archived evidence that house prices do fall. You might want to check this out - learn something about history yourself:


Try to respond in a more mature fashion. Despite invaluable feedback from commentators, including myself, your comments still lack any useful insight.

Good luck

Breaking NEWS … History lessons from TTP the One LOL

Quote from Tony Alexander's (BNZ chief economist) latest weekly newsletter:
'This time I personally don’t think any of us really has a clue what the net gain will be in three year’s time. On the downside one might cite the improving labour market in Australia, foreign students in NZ completing studies, and government plans to slash gross migrant inflows by up to 30,000.

But on the upside the NZ labour market remains very short of people, and the government has notably not repeated its commitment to slashing migrant inflows – perhaps in the face of feedback that some industries would be very severely impacted. Net migration inflows will likely continue for quite a few more years and remain supportive of growth in the economy, housing markets etc.'

So basically, take your pick. Forecasting is notoriously unreliable.

This is terrible
I agree with Big Tony
The worlds gone mad

Westpac – talking their book “down”!?!

A follow on, and a tired old line I know….but my vent for the evening.

“If Nick Smith was the answer – it must have been a bloody stupid question.”

You’re no curd custard
I think you’re right about Westpac

Immigration rates shouldnt be a fixed value but based on growing net wealth of NZ.
We should give the net migration rate to the RBNZ to use a macroeconomic tool along with interest rates to provide price stability (and full employment objective).
Their aim would also be to maximise gdp per capita growth.
The government could set the maximum and minimum net migration rates for the RBNZ to work within (say 0% and 2%).
This approach would probably require house prices to be added back into inflation rate calculations.
The key issue is then for the government to set the details of the immigration policy so that the net migrants provide skills in areas most needed.
In a way immigrants, provide a subsidised pool of labour for businesses as they dont have to train them. It would also be worth considering applying a market driven price paid to the government that the businesses have to pay to bring in immigrant labour. The business would not have the right to recoup the cost directly from the immigrant except via bonding to work for a fixed period. The price would typically settle near the cost of training up local labour putting both labour sources on a more equal footing.

Page B12 Herald today quotes Grant Spencer "..an increase in international labour mobility has also affected wage inflation in NZ" which is a nice way of saying we are importing 3rd world wages. No problem if you have the income of the Reserve Bank governor but is sad for Kiwi battlers.

Yes, importing third world wages while National and its property speculators have encouraged exorbitantly high house prices. A sure recipe for disaster. And some of these idiots are still spruiking.

I dont believe Westpac's forecasts even though I bank with them. Yes its seems property investing is still going to be the way to build wealth in the future. I get a 12% rent yield on my properties (using historical purchase price as base=loans that I have).Thats before even looking at equity increases. I bought in 2005/6. So prices have doubled(minimum) over the last 10 yr period and I believe in 2020 the market will take off again. Get in while prices are flat.

I wouldn't make any decisions on this article, after 10 years of following economic commentary Tony Alexander of the BNZ is the ONLY column I follow he's on the money !

Thanks for the tip, looked this up and read the weekly report. Seems some honest comments by him without all the extreme views of people on here posted at the bottom of it !

Indeed, and good point...Tony has been consistently realistic up and down markets.

I found the chart on GDP growth interesting and concerning. While per capita growth has lagged nominal growth throughout the period charted(from 200),the gaps has been widening since 2012.

Can someone explain the factors behind this worrying trend?

Probably need to look to Auckland and think about the large numbers of low skill immigrants that have entered the country since 2012. This is an excerpt from Treasury's briefing to incoming ministers on infrastructure (as reported in Redell's blog):

"Auckland’s ability to absorb growth has been reached. Environmental, housing and transport indicators all reflect a city under increasing pressure. Traditionally, Auckland has been more productive than other regions of New Zealand but, on a per capita basis, this productivity premium has been shrinking over time. Auckland is not performing as well as expected for its size and in comparison to other primary cities around the world. There are opportunities to increase this productivity but only if supply constraints, especially transport and housing, are resolved."


I lived in an un-lined garage for 3 years. It was great. It was colder in the cold and hotter in the heat but the air inside was always wonderfully fresh, due to the permanent ventilation, and I didn't get sick. The savings allowed me to get a good start financially. Now I live in a house but even with a ventilation system the air inside isn't thae same. I believe the reason many not-rich people get sick is they don't adequately ventilate their rentals. A significant part of the problem is education - not so much any need for insulation. Some insulation products, I suspect, like many other building materials, may give off VOCs and poison the occupants.