Housing supply creaking under record influx of immigrants

by NZ Adviser01 May 2017
(Bloomberg) -- New Zealanders love to show off their beautiful country to foreign visitors; sharing it with them permanently is another matter.

An unprecedented influx of immigrants is exacerbating a housing shortage and stretching infrastructure such as schools and hospitals, sparking heated political debate around the issue ahead of this year's general election."Now, more than ever, we need to pause and rethink our current settings," said Andrew Little, leader of the Labour Party, the main opposition, who noted that half of the new arrivals decide to live in Auckland. "We can’t continue to bring so many people into our biggest city, which is already suffering from traffic congestion, overcrowded schools and soaring house prices." 

Migration statistics continue to defy forecasts of a slowdown, having climbed continuously over the past four years. A record 129,518 people moved to New Zealand in the year through March. That coincided with the lowest number of Kiwis relocating abroad in more than 30 years, resulting in a record 71,932 net gain.

New Zealand's strong economy and isolation make it an increasingly attractive place to live amid the global uncertainties caused by terrorism, Brexit and Donald Trump's U.S. presidency. ASB Bank economists expect immigration levels to remain elevated for some time to come, putting New Zealand's population on track to reach 5 million in 2019, from 4.7 million today.

While opposition parties are trying to exploit concerns about the impact of population growth ahead of the Sept. 23 election, the government says immigrants fill vacancies in key industries and help to fuel economic growth. Still, this month it announced plans to tighten access to visas for unskilled workers, which it said are aimed at "managing the number and improving the quality of migrants coming to New Zealand."

Immigrants arriving on work visas rose 13 percent, to 43,725, in the year through March, Statistics New Zealand said on Wednesday. Arrivals with a residence visa increased 14 percent, while those on a student visa fell by the same amount.

Newcomers from the U.K. increased 12 percent, to 14,999, while those from China rose 5.4 percent, to 12,358. Indian arrivals tumbled after a 38 percent slump in those coming on student visas. While Australia was the biggest source of immigrants, at 25,557 people, almost two-thirds of them were New Zealand citizens returning home.

A characteristic of the immigration cycle since 2012 has been the decline in New Zealand citizens leaving the country to seek jobs or better pay abroad, often in Australia, and more Kiwis coming back as mining and construction work became more scarce across the Tasman Sea.In the year through March, departures of citizens exceeded arrivals by just 1,341 — the smallest annual total since 1984.

New Zealand's economy is among the fastest-growing in the developed world, with an annual expansion of about 3 percent over the past several years.

"Because of our relatively unique positive outlook, people just keep turning up and Kiwis keep staying home," Prime Minister Bill English said last month. "Our real challenge is responding to that growth and investing to support it, so that people can have the quality of life here that they come for."

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