More bad news for the NZ economy today with the release of the latest set of immigration figures.
Net migration has sunk to an 18 month low as more as more and more Kiwis leave for Australia. This may be the first indication that the NZ government’s recent tinkering with the taxation system has done nothing to keep people in the country, raising the rate of GST to 15% may have even hastened the exodus to Australia, which enjoys a 10% tax.
The latest set of figures is sure to be an embarrassment for the government, John Key pledged to help retain and attract back Kiwis to the country if he were elected. The recent unemployment figures Up to 6 % from 5.1% ) and economic growth (negative 1.65 %) were a disappointment too, though hardly unexpected.
The news broke this way:
“New Zealand’s net migration shrank to an 18-month low last month, suggesting the economic impetus provided by people choosing to live here may be abating.
A net 250 permanent and long-term migrants arrived last month, seasonally adjusted, the lowest since November 2008, according to Statistics New Zealand. Figures for April were revised down to 730 from 770.
Annual immigration slowed to 17,967 in the 12 months ended May 31, the fourth straight month that the annual number has declined, from 19,954 in the 12 months ended April 31.
“Net migration continues to moderate, and arguably at a slightly faster pace than we had expected,” said Philip Borkin, economist at Goldman Sachs JBWere. “Visitor arrivals growth is also looking soft relative to our forecasts, with weak arrivals from the UK and Europe, in particular, appearing to be the major drivers.”
Departures for Australia rose to 1,693 in May, from 1,241 in the same month last year, for an annual exodus of 15,200 across the Tasman…” source
Looks like our previous prediction that migration across the Tasman was about to soar has been proved right.
22 June 2010 Update
The following day Businessday.co.nz published the article “Fall in migration brings fear for housing, retail” saying that “Net migration almost stopped last month, prompting warnings that a leading driver of economic strength could be waning…”
Rising interest rates are another stressor on NZ’s fragile economic recovery, already under pressure from the prospect of the withdrawal of monetary policy stimulus, so it will be interesting to see if OCR rises continue in coming months.
Banks acted yesterday, most of them raising mortgage rates by 0.25%. ASB’s variable rate rose t0 6%, ANZ to 5.95 % and National Bank to 5.99 % source
Could this be the beginning of the end for the NZ housing market? Many present property owners have probably never experienced a housing market collapse in a country as remote, over priced and as dependent on ‘fresh blood’ as New Zealand.
The article also strangely revealed that “a net 400 moved to Britain in May, the same as the net gain from India” we see this as a veiled suggestion that some quarters may not be happy with the way that NZ’s racial demographic is headed.
Read some of our previous blog posts:
- Trans Tasman migration to soar (May 2010)– “Australia’s recent budget announcement that employers’ pension contributions will be increased from 9 to 12% and corporate tax is to be cut from 30 to 28% is set to spark off an increase in the already rising rate of migration of Kiwis across the Tasman Sea. Calls have already started for New Zealand to match the deal before it’s too late. New Zealand is soon to be burdened with changes in the taxation of investment property and there is a proposal to increase GST to 15%. (something that will cause hardship for a lot of people because GST is placed on food) A relatively strong dollar, reducing the purchasing power of migrants and visitors, is also putting further strain on businesses…”
- Kiwis leaving for Australia at 12 month high (April 2010) – “Trans Tasman migration has just hit a 12 month high, with Kiwis leaving in droves looking for a better life in Australia. See NZ emigration growth continues to slow, trans Tasman departures at 12 month high…”
- Net migration falling, permanent departures up 7.2% (March 2010) – ” The ASB says that net migration has fallen from its peak and could slow by more than half to around 10,000 people a year. It seems that employment growth and a more favorable outlook across the Tasman will continue to attract Kiwis out of New Zealand. These figures will have an impact on a housing market already feeling the burden of forthcoming changes in the taxation of investment property, a proposal to increase GST to 15% and a relatively strong dollar reducing the purchasing power of migrants…”