If he didn't drop out of university, Nilesh Ladwa doesn't think he'd have been able to buy his Auckland house by now.

Ladwa, 27, was two-and-a-half years through a bachelor's in engineering when he left to become a qualified mechanic.

Since then he has paid off his $15,000 student loan and gone halves with his brother on a house in Stanmore Bay.

Ladwa is one of many Kiwis turning away from tertiary education while overseas students are lapping it up.

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A recently released Ministry of Education report found that 5000 fewer students completed a tertiary qualification in 2015 than 2014, dropping numbers from 127,000 to 122,000. While international students completing qualifications rose from 18,200 to 21,500.

The strengthening economy and few enrolments from youth as many from the recent population bulge have already finished their qualification are some factors that have affected the decrease the report suggests.

Ladwa went to university as that was what everyone else was doing. Once he realised it wasn't for him he left to do his apprenticeship at Whangaparaoa Autocentre.

Nilesh Ladwa with his girlfriend Amita Kala who completed her Bachelors of Commerce. Photo / Supplied
Nilesh Ladwa with his girlfriend Amita Kala who completed her Bachelors of Commerce. Photo / Supplied

"I just found that being in a classroom wasn't my thing."

He doesn't think he would have been able to purchase a house if he had stayed at university as he'd still be paying off his student loan.

Masters is the only qualification with boosted numbers in completion with 11.4 per cent more domestic students tucking one away in 2015 than the previous year.

Tertiary Education, Skills and Employment Minister Steven Joyce said the decline in university numbers is a "very straightforward" correlation to the strength of the economy and the diminished size of the 18 to 24-year-old population.

"As the economy strengthens and more young people have work options they are less likely to be studying full-time in a tertiary institute.

"We see that tracked over many, many years.

"Overall we have a higher proportion of available students studying and higher proportion studying at a higher level."

The main thing that sticks out for Joyce in the report is the tremendous growth in the success rate of Maori and Pacific students studying at higher levels. There was a 70 per cent increase in Maori and 80 per cent in Pasifika students attaining bachelor's degrees in 2015 from 2008.

"We haven't completely closed the gap yet but it's important for New Zealand's future that we continue this trend."

Joyce said funding to the total university sector has increased by 18.5 per cent since 2008 to over $4 billion.

"Which is 1.7 per cent of gross domestic product. This report shows our careful management of the tertiary system is helping a higher proportion of young people to achieve qualifications at higher levels and gain the skills they need to be a success in the job market."

Tertiary Education Outcomes and Qualification Completions 2015 is edition 18 in an annual series on the tertiary education sector. This report is the second of six to be published in the Profile and Trends 2015 series.