23 Nov 2011

Migration loss will impact housing, demand

8:10 am on 23 November 2011

The weak housing market has received a further blow to its recovery with more people seeking their fortunes across the Tasman, driving the country's first annual migration loss in a decade.

Statistics New Zealand says 100 more people left than arrived in the year to October, compared with more than 12,500 who came to New Zealand to live and work long term in the previous year.

A net 35,000 of them went to Australia, attracted by its stronger economy and higher wages.

New Zealand's economic recovery has been patchier and ANZ Bank senior economist Mark Smith says the shift to Australia's greener pastures will curb demand.

He says spending received a boost with the Rugby World Cup providing quite a lot of demand in the short term.

Mr Smith says the problem is what happens after the visitors leave.

"The prospect we're facing is an initial boom and quite a slump afterwards," he says.

Mr Smith says the drift across the Tasman will be countered by the arrival of people from hard-hit economies in Europe, Britain and the United States.

He suggests that while New Zealanders will continue to be attracted across the Tasman, New Zealand is likely to see more Europeans coming here, pushing New Zealand into positive migration flow early in 2012.

Separately, the Rugby World Cup significantly boosted the number of visitors, which rose 17% to 215,900 in October compared with the same period a year earlier.

For the year, visitor numbers rose 3% to 2.58 million.

Mr Smith says a weaker global economy and the relatively high New Zealand dollar means the tourism sector is likely to face bleaker times ahead.

Australian tourist numbers are increasing, he says, but high-spending tourists from Europe and parts of Asia have declined.