KEY POINTS:
The net inflow of migrants has dwindled to a trickle this year, easing pressure on the housing market but doing little to relieve labour shortages.
Last month permanent and long-term arrivals exceeded departures by 360, Statistics NZ reported. The figure is based on airport declarations of people saying they intend to stay, or intend to be gone, for at least a year.
For the first five months of 2007 the net inflow has been 2100.
If that rate is sustained for the rest of the year the gain will be only 5000, compared with the average gain of more than 12,000 for the past 16 years.
While the number of arrivals is relatively steady - the 6440 last month was only 10 more than in May last year - departures have been on a rising trend; 6800 left last month, 9 per cent more than in May last year.
The loss is mainly to Australia. Just under 4000 migrants moved across the Tasman in the year ended May, an 11.6 per cent increase on the year before. With a tight labour market in Australia as well, economists do not expect that trend to change soon.
Net migrant inflow since has been running at only half the rate the Reserve Bank assumes for 2007.
Given the close correlation between net migration and house sales this was good news for the Reserve Bank, said Deutsche Bank chief economist Darren Gibbs.
The central bank's submission to a parliamentary inquiry into housing affordability called on the Government to manage migration inflows with an eye to moderating housing demand.
ANZ National Bank chief economist Cameron Bagrie expected signs of softening in housing market activity later in the year as well as an easing in house price growth. "However, easing migration represents a double-edged sword to monetary policy as it will accentuate skill shortages."
Incoming
* The net inflow of migrants was 360 last Month.
* If current trends continue, a net 5000 migrants will arrive this year, well down on the average of 12,000.
* The drop is likely to relieve pressure on house prices but add to a skill shortage.
