The kiwi dollar however cut both ways, with visitor arrivals falling 4 per cent to 176,084 in the month compared the July last year, the department said.
The decline was eased by the arrival of 1,200 tourists who came in anticipation of the Rugby World Cup.
Visitors from China were the only category in the month to see an increase.
On a seasonally adjusted basis, there was a net loss of 200 permanent and long-term migrants in July, as Christchurch residents continued to head overseas in the wake of the March earthquake.
Unadjusted figures showed 800 Christchurch residents left to live overseas in the month, up from 500 at the same time last year.
In July, the net outflow of migrants to Australia was 3200, the highest recorded for a July month, according to the department.
The previous high for a July month was a net outflow of 2900 in 1979.
In the year ended July 2011, New Zealand had a net migration gain of 2900, down from 15,200 the previous year.
The latest figure is below the average annual net migration gain of 12,000 over the last 20 years, and is the lowest net gain since the October 2001.