Net migration reaches 10-year high as exodus to Australia slows

Cooling job prospects across the Tasman are a factor in the population gain, says an economist. Photo / Martin Sykes

New Zealand gained a net 3,000 permanent and long-term migrants last month, the most since June 2003.

It pushed the annual net inflow to 17,500, in contrast to a net loss of 2300 the previous year and well above the average gain of 11,300 over the past 20 years.

The turnaround is largely explained by a reduction in the net loss of people to Australia, which at 23,500 in the year to October was 15,800 fewer than the year before.

The latest annual loss resulted from 42,000 departures to Australia (down 11,700 from the October 2012 year), partly offset by 18,500 arrivals (up 4,200), Statistics New Zealand said. In both directions, most migrants were New Zealand citizens.

The latest year also saw a net inflow of 5,900 from Britain, 5,500 from China and 5,200 from India.

"Net immigration is now clearly on a cyclical upswing, partly due to more people moving to Auckland and Canterbury, but mainly due to fewer people moving to Australia as job prospects there have cooled," said Westpac economist Felix Delbruck.

"We expect net immigration to peak at over 30,000 next year, which would make this the biggest migration cycle since the early 2000s. The upturn in migration is a significant reason why we expect house prices to keep rising next year, albeit at a slower pace, despite lending restrictions and higher mortgage rates."

The boost to the labour supply from migration comes as demand is picking up.

ANZ's job ads indicator rose 4.5 per cent last month, seasonally adjusted, to be 9.75 per cent up on a year ago.

"Canterbury is sustaining a much higher level of job advertising than before the earthquakes, whereas Auckland and Wellington have similar numbers of total job ads as in early 2011," said ANZ economist Sharon Zollner. The data suggested the unemployment rate would continue to decline over coming quarters, she said.

The Ministry of Business, Innovation and Employment reported a 25 per cent rise in ads for construction and engineering workers last month compared with a year ago and a 17 per cent rise in the hospitality and tourism sector.