Finance Minister Grant Robertson said Westpac's estimated fall in net migration went further than Reserve Bank and Treasury estimates.
He said the Government approach to immigration would eventually see net migration track downwards.
"The exact numbers that then flow from the change of settings, we'll see over time."
The October statistics showed an uptick in new arrivals and returning New Zealand citizens.
"However, this looks like normal month-to-month volatility," Ranchhod said.
"Looking at the longer trends, the uptrend in both of these flows was arrested earlier this year," he said.
"Looking at the breakdown of the monthly flows, a continued trend decline in net migration looks to be on the cards for the coming year."
ASB's Smith noted that despite the October lift, the trend (3-month average) in net permanent and long term (PLT) monthly arrivals continued to ease from historically high levels.
At about 5,413 people October was well below the 6,200 peak achieved late last year.
Annual net PLT arrivals fell to 70,694 people, still high in a historical sense, but the lowest annual total for any month in 2017.
"The outlook is for a continuing moderation in net PLT inflows, as policy changes trigger a moderation in net non-NZ resident arrival numbers," he said. "Whilst departure levels are expected to lift from historically low levels given the strengthening global outlook and Australian labour market.
The trend in departures was interesting, said Westpac's Ranchhod. Departures of New Zealand citizens had levelled off.
"However, departures of non-New Zealand citizens have been steadily rising since mid-2016 and are now 30 per cent higher than this time last year. This group includes people who would have come over in recent years on temporary work and student visas," Ranchhod said.
"Typically those who come over on these programs stay for around three to four years. Given that the surge in foreign arrivals began in 2013, we have been expecting to see a corresponding surge in departures," he said
"Combined with likely changes in Government policy, we expect that the above trends will see annual net migration will drop from around 70,000 now to 10,000 in 2021," he said.
"Most of this change is due to natural forces that drive net migration (like the strength of the global economy), rather than policy."
Prime Minister Jacinda Ardern said immigration was not in the Government's 100-day plan and it would take some time before net migration dropped.
She said it was important to get the settings right, rather than focus on a specific number.
- Additional reporting Derek Cheng
