Immigration reversal: Kiwibank expects net 20,000 people will leave NZ this year

Monday, 28 March 2022

Kiwibank believes net emigration could climb to a level only seen once so far this decade, during the Australian mining boom in 2011.

People emigrating away from New Zealand will outnumber immigrants arriving in the country by 20,000 this year, Kiwibank has predicted in a greatly revised forecast.

The bank said the expected outflow would roughly match the last major period of net emigration in 2011, when an Australian mining boom attracted many workers to cross the ditch in search of six-figure salaries.

If it proves to be on the money, Kiwibank’s forecast could add fuel to a correction in the housing market and potentially deepen skills shortages in the labour market.

Kiwibank had previously expected net immigration would climb to about 20,000 this year as the country’s tight labour market attracted more migrants.

* Border reopening: ANZ predicts 20,000 Kiwis a year will leave for Australia

Immigration Minister Kris Faafoi announces thousands of migrants on temporary work visas would be fast-tracked for residency after a major immigration policy shift. (First published on September 30.)

* 10,000 new workers a year needed to fill labour gap in Canterbury, study finds

But it now forecasts long-term departures will increasingly exceed arrivals over the rest of this year.

“The assurance that Kiwis moving overseas can return home without the need for MIQ is expected to rekindle the desire for the big ‘OE’,” it said.

“Long-term arrivals in contrast will be held back by the gradual reopening of the border.”

Kiwibank expects the net outflow will be relatively shortly term.

Immigration should start to outpace emigration once again towards the end of next year, once Covid restrictions are lifted on arrivals from China, India and South Africa, it said, forecasting net immigration would then return to about 30,000 a year.

“That's higher than the long-term average, but well down from pre-Covid highs.”

ANZ Bank also warned earlier in March that the “staggered nature” of the border reopening plan meant there was a significant risk New Zealand could see a large net outflow of people over the course of this year.

“That could put further pressure on our already-stretched labour market, while adding further to housing headwinds,” it said then.

But it also said there was too much uncertainty about the timing and magnitude of migration flows to try to build them into its economic forecasts.