This government could find itself with a worse housing crisis on its plate than the one it inherited from National, Greg Ninness suggests

This government could find itself with a worse housing crisis on its plate than the one it inherited from National, Greg Ninness suggests

By Greg Ninness

Population growth from migration is running at its lowest level in two years, according to Statistics New Zealand’s latest quarterly migration figures.

These show there was net gain of 19,062 people from migration in the fourth quarter of last year, down 4.8% compared to the gain of 20,032 in Q4 2016 and just below the gain of 19,398 in Q4 2015 (all figures in this article refer to people arriving in or leaving the country for 12 months or more, or returning long term after an absence of 12 months or more).

However even bigger changes are occurring in the mix of people coming to and departing from NZ and that could have big implications for the Government's ability to tackle the housing crisis.

The main drivers of the decline have been a slight drop in the number of migrants arriving, and a big increase in the numbers of the same group leaving after an extended stay.

In the fourth quarter of last year there was a modest 2% drop in the number of citizens of countries other than NZ or Australia who arrived here, at 21,898 compared to 22,350 in Q4 2016.

At the same time there was a more significant rise in the number of the same group who departed long term, with 6554 departures in Q4 2017, up 23% compared to the same period of 2016, and up 44% compared to the same period of 2015.

So slightly fewer have been arriving, but quite a few more departing, which meant there was a net gain of 15,344 non-New Zealand and non-Australian citizens in Q4 2017, down 9.9% compared to the same period of 2016.

However the total net gain for the quarter was pushed up by the fact that there was also a net gain of 2845 New Zealand citizens and 873 Australian citizens during the quarter, giving a total net gain of 19,062, which was still down 4.8% compared to a year earlier.

Interesting trends

But there are also some interesting trends emerging in the migration patterns of New Zealand and Australian citizens.

More New Zealand citizens are returning home after an extended absence and fewer are leaving long term.

In Q4 2017, 9891 New Zealand citizens arrived back compared to 9665 in Q4 2016, while 7046 departed long term (7414 in Q4 2016), which gave a net gain of 2845 in Q4 2017 compared to 2251 in Q4 2016.

A similar trend is evident for Australian citizens although the numbers are lower, with a net gain of 873 Australians in Q4 2017 compared to 753 in Q4 2017.

So there are two opposing trends.

More New Zealanders and Australians are arriving and fewer are leaving, while for citizens of other countries the reverse is true.

That could mean that the year-on-year decline in the total net gain of migrants from all sources which we have started seeing over the last few months, could be short lived.

The number of New Zealand citizens arriving home has been steadily rising since 2012 and is now the highest it has been in any quarter of any year since 1990, and has been surpassed only once since Statistics NZ’s published figures began in 1978.

At the same time, the number of New Zealanders leaving this country long term is declining, with the 7046 that departed in the fourth quarter of last year being the lowest it has been in any quarter of any year since 1993.

The combination of more New Zealand citizens arriving and fewer leaving meant the net gain of 2845 in Q4 2017 was the highest it has been in any quarter of any year since the start of Statistics NZ’s published records in 1978.

Upward risk

If that trend continues at pace, and/or the recent decline in the gain of citizens from other countries starts to slow, there’s a risk that the total gain from net migration could start pushing up again.

That’s a real risk for the Government.

Because even though the rate of population gain from migration has started to slowly decline, it is still running at levels that are putting real strain on infrastructure such as housing, transport and social services.

And although the Government has ambitious plans in areas such as housing, it will likely be at least two years before we start to see significant results from those plans, and probably longer.

So if migration starts tracking up again, there’s a danger the government could be heading into the next election with a housing crisis that’s worse than the one it inherited.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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40 Comments

Hence the unlikelihood of house prices crashing.
More & more demand, despite a slight recent tightening of the immigration and international student settings.
Apart from Australia, it’s not as easy for kiwis to get work visas elsewhere as previously also.

That was under National, I'm still waiting to hear what kind of changes, democracy has delivered us.

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All the horticulture around here has become dependent on the work schemes with Island and various other cheap labourers.
So you allow cheap labour in and they build businesses around it ,same as Mexicans in California, these businesses need to start paying a living wage and then we won't need to keep importing cheap low skilled workers from offshore. I am convinced it's about the money, pay enough and the locals will appear otherwise it's a never ending cycle and the taxpayer gets to pick up the pieces, none of the Indian families who did some work for me on my vineyard have children following their path, no they have all been to uni or running businesses in town.

I am a bit confused by your comment Andrew. That others should pay enough to employ locals whilst you employ indians on low wages who tell their kids to look for other business opportunities

I had Indian workers come and prune but they belonged to the winery, I was under contract. Having spent time in India I enjoyed working with them.

Today many of the Islanders come over and get accomodation supplied, they gat a small allowance, every thing is deducted, travel, food housing. When they finish the season they get around 10k each to take home.
Orchards will kick up a fuss but it's the world we live in NZ is an expensive little country.

Having a PI family and having worked in a PI country for 14 years I can see the value of a well administered scheme as you describe. $10k is a fortune in the Melanesian Island my family comes from and will do a great deal of good. This makes more sense and will do more good than most of our foreign aid budget.
Note emphasis on well administered - there have been press reports of scams.

I think this should be administered as part of our aid obligations in the Pacific, done well, it could work extraordinarily well for both the growers and the workers alike. Rip off merchants, not required.

I have traveled to very remote parts of Papua New Guinea and other Pacific nations, so I have seen a lot of poverty in our affluent terms. (Starvation is seldom a problem). Temporary workers from such places do not (and should not) need to pay for our own high standards of living. Glaringly high house prices being a good start. Thus paying rates lesser than what a NZ resident requires to survive here, is a win win situation for both sides with moderation of course. Furthermore, I am strongly in favour of NZ taking much better care of our nearby neighbours. The Chinese influence there is growing.

Even remote villagers now have access to modern communications, even Facebook. Mobile phones are charged with solar power as are some small lighting systems.

The difference here is that foreign aid is paid out of general taxation hence rich people pay for it too. This instead is paid for by the nz workers that have to accept lower wages and standards because of this. Thanks

An excellent comment and interesting from someone in the know how money gvien or earned by individuals does more good than foreign aid

LOL the jobs in horticulture are seasonal. Many jobs only last for 8-10 weeks. I agree that workers should be paid a living wage, but there is simply not enough available local labour force in the regions to supply the industry with enough workers. I work in the industry and we employ a lot of people who are WINZ clients for the rest of the year, but there is still a shortage of workers that needs to be filled with RSE workers. It's a win-win though as these workers don't have work or benefits back home so are able to support their families on the money they take home, whilst the regions get a much needed boost to their workforce for short periods of time.

PI or other foreign workers doing seasonal work for 8-10 weeks will not be recorded in our population figures. The stats are based on those planning to stay more than 12 months.

They stay longer than 8-10 weeks.They start thinning apples before X-mas and then pick and all the squash, many end up down south pruning grapes for most of winter.

I could be wrong but I think their visas are for less than a year and so if they fill in their entry card to NZ correctly they will be classed as temporary not permanent population.

Permanent residency is the reliable statistic but even that has to be carefully interpreted.

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If only we had some way of controlling the numbers of people allowed to come and live here...

We do: it is the issuing of Visas by MBIE. They don't even have to inform parliament to change their rules - simply adjust the point counts for permanent residency and the existing quotas for 'working-holiday' visas. Given the frauds and rorts involved which at the extreme includes naive foreign girls being forced in to sex work the priority should be closing down the right to work for foreign students.
PS. I once made the suggestion that the quotas by country of origin should be tightened for all countries and was told by a professor that I was being 'racist' - however NZ has had quotas for decades. It is dangerous to make any comments about NZ population.

Yes it was sarcasm.

There are many people in New Zealand confused about the meaning of that word these days.

I did detect irony and my reply was purely to explain how easy it is to control who comes in and how long they can stay - parliament has delegated all authority to the minister of immigration (even the minister for tourism has no control over visitor visas). Having been delegated it means there is never a debate about population.
The second reason for my replying to your highly relevant sarcastic remark is having read prof Stringer's report on 'widespread worker exploitation' [Dec 2016] and having seen no action on the part of this or the previous government I never miss a chance to make a point of reminding everyone that our dept of Immigration is apparently indifferent to conditions equivalent to 'modern slavery'. That was the term used by a NZ judge last week.

The main two factors affecting NZ long term population: [1] our granting of permanent visas [2] the state of the Australian economy and how welcome Australia is to Kiwis.

NZ is a back door to Australia no matter how hard our politicians spin it. The Australians are well aware of this and are already making it harder for NZers to live there. We are totally shooting ourselves in the foot with our immigration policies which are really only benefiting wealthier kiwis who don't need to seek higher paying jobs in Australia and who enjoy the cheap labour.

A good read. Its conclusion "" There needs to be more building for rent, at all levels of affordability. Which, since private developers won’t do it by themselves, I’d suggest that the state invests in what are long-term assets, in the same way that it does in infrastructure."" and that sounds a bit like Kiwibuild.

Yes. We need to relax our obsession with owning. I understand Kiwibuild is focussed on ownership.
I would like to see 10,000 kiwibuild homes built for ownership each year in Auckland, and 10,000 for rental (not social housing - market rate rentals owned and managed by the government. Allow pets etc. puts supply into the rental market and much greater tenancy security)

While we may need to change our views on home ownership so do we need to change the way we rent. Even if people do not own the house they live in, they MUST be able to make it a home. Our current tenancy laws formed back in the day when renting was short term and home ownership was the norm, they are not designed for permanence. I strongly believe our tenancy laws have contributed to the general decay in society. The change could be seen through the years by simply looking at berms outside houses, and how they went from tidy, mowed some with a bit of garden on the street side of a fence to scruffy and unkempt.

Remember - when they leave we have no control over them and what they do - but we carry the can for them

A greater degree of attention should be given to the "New Zealanders leaving long term" category. An understanding is needed of the definition of a departing NZer. Is it a Permanent Resident travelling on a third-country passport. Is it a newly-printed NZ adult citizen travelling on a newly issued NZ passport that is 1 month old. Is it a native-born local.

The question is - are they permanent residents who came from third-country and decide to turkey off before their 5 years is up. If so why. Why arent we retaining them? Next are people departing who have fulfilled their 5 year residency requirement, obtained citizenship, obtained a NZ passport and leave. Why arent we retaining them?

NZ needs to get ahead of the game. This is evidenced by UK exiting Brexit, US building a wall and deporting DACA's and Dreamers, and Australia deporting ALL undesirables, regardless of origin, with some back to NZ. Yesterdays news - a king-hitter is deported back to NZ before he can even spend time in jail. A 19 year old girl who stole $600 worth of jewellery is told she is already halfway back across the Tasman

And todays news in NZ Herald the feared Australian Motorcycle gang the Comancheros has formed a chapter in NZ. All members are deported to NZ on the basis they originated in New Zealand. Look a little closer and the nationalities are predominantly of a third-country origin. We dont know if they are NZ citizens.

What is evident is we accept people into NZ give them Residency or Citizenship and when they leave they are out of our control but we become responsible for what happens elsewhere

Read the Headline
'Stronger and stronger' - Australia's most dangerous gang the Comancheros open New Zealand chapter - read further and you find it is drop-kicks from NZ who couldnt make it in AU, deported back here, demanding support

http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11996666

All least the criminals should increase the countries GDP. Think of all the insurance claims, burglaries, victim counselling fees etc.

Update - On TVNZ One News 19 February 2018 - the Comancheros NZ chapter has close ties to the Auckland Tongan community

So,.... "And although the Government has ambitious plans in areas such as housing, it will likely be at least two years before we start to see significant results from those plans, and probably longer." ... longer is more likely indeed, .... At the going rate, we will be fortunate to see 5000 "affordable" Kiwi built units offered for sale by the End of 2019 .... By then house prices and rents will be north of 5 -10% from what they are today ... These units will not be sold but will be rented to the homeless and most needy people on the HNZ lists .... so just recycling money and no real effect on housing shortage ....

It is so amazing when people suddenly realise and discover the Obvious !! and go Wow, now what?

We won't need another GFC or earthquake to burn a hole in the budget or borrow more .... this lot will eventually backtrack on some flimsy promises and stupid ideas - but time will tell ... I hope like hell I am wrong.

Relax. You are always wrong.

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It seems we can expect population growth to continue.
We ring our hands in bewilderment that we have a housing crisis. We sit in traffic jams on roads that were once free flowing. Wait on hospital lists while our kids are in overcrowded classrooms and we ring our hands wondering what happened in paradise.
Winston the only political voice warning of the demise has lost his voice as he has been removed from opposition and becomes complicit with the ruling party.

So people not from NZ or Aussie still flooding in at a rate of 87,592 a year. Pretty much a million people every 7 to 10 years from cultures that may or may not be compatible with our own.

Central Planning gone nuts. Are they trying to create the next Northern Ireland? At these rates they will not be able to assimilate and become kiwis. Already far too many Brits in our civil service messing things up as only they know how. Rules, Rules Rules, we didn't need them because we had a common understanding of what was decent behaviour.

In the fourth quarter of last year there was a modest 2% drop in the number of citizens of countries other than NZ or Australia who arrived here, at 21,898 compared to 22,350 in Q4 2016.

housing crisis would be over in one move, by stopping immigration for a year, if 87,592 people were stopping from coming in...that's the giant political elephant in NZ, which labour and NZ First said they would move on, but are now delaying

Certainly some Kiwis want serious population growth but my best guess is most don't (without a population being discussed in parliament it is hard to judge what NZ really wants). However our political system is mainly funded by home owners who want house prices ever higher, small businesses who want cheap workers and avoiding the expense and difficulty of training staff and finally a few rather dodgy foreign companies; all three groups have a vested interest in high immigration and all three don't really care about the quality.

Jeez rp. Don't listen to what politicians say they will do. Look at where their ideas come from and figure out what they are likely to do from that. Labour still think immigration is trendy and A Very Good Thing, they are really, really, really unlikely to actually do anything much to change long standing party policy because it goes against the party thought process. Winston seems to have had a personality change once in power, just like with Helen Clarke, funny that.

So expect very, very weak action from them. Politicians play to our hopes but don't have to actually deliver much as there are always plenty of handy excuses and a first term government can always blame their predecessor for things being "much worse than we expected".

WP voters deserve what they get ( and will be to blame for what the entire country will endure) .. they never learn !!

And yet in every online forum (across the political spectrum) the view that immigration is too high and needs reducing to more sustainable levels gets majority support.

If all the political parties support high migration and Winston proves himself toothless, I think that opens a gap for another political party to emerge on that platform.

I have seen several pro-immigration comments but you are right they are in the minority. Maybe it is like several other issues where only those opposed to what is happening bother commenting - for example anti-abortion, 10-80 poison. Probably most people give it no thought and would just vote for the status quo, as per abolition of slavery, votes for women, homosexual law reform, equal pay - they all seem so obvious now but at the time it was (1) a few noisy protesters, (2) a few die hard against change and (3) the majority quite indifferent.

"" think 'xxxxx' is trendy and A Very Good Thing"" where 'xxxxx' can stand for 'immigration', 'alcohol', 'homework from primary schools', 'tablets for a headache', etc. It depends on what you mean and how much. FYI how about a small glass of wine, a short poem to read and an aspirin are good for you and there are many highly talented immigrants that do NZ a favour by choosing to live here. Careful choice and moderation.

Very correct rp. The Kiwi build 10,000 homes a year scheme wont even cover the immigration so roll on the housing crisis.

Ha ha Roger, I was saying just the same thing yesterday how the Brits come to NZ because they love our freedom and then get jobs in councils and unions and make lots of rules. They just cant help themselves.(generalizing of coarse)
Immigrants who really wind me up are the ones who say that what this country needs is more people.