Strong population growth needs to be managed

Aaron Drew.

In a previous article (Hawke's Bay Today, March 29), I discussed that the region is likely experiencing much stronger population growth than is assumed in long-term council planning and that, while this is a great "vote of confidence" for the region, it does raise housing and infrastructure challenges that must be managed if the Bay is to maintain its lifestyle advantages over the larger cities.

Last week we received confirmation from Statistics New Zealand (SNZ) that the tourism and migration boom is continuing in New Zealand and that the Bay is well and truly participating in this.

The SNZ release showed about 3.4 million people are flying (or cruising) into New Zealand for a holiday, to do business, to reconnect with friends and family, or to settle.

This is 10 per cent more than the year before and continues a decade of solid growth in the number of arrivals. No wonder the tourism industry is chasing down the dairy sector to become New Zealand's largest export earner.

In addition to short-term visitor arrivals, the data also showed there were more than 124,000 people moving to New Zealand on a long-term or permanent basis (people who intend to live in New Zealand for more than a year).

While the lion's share of this immigration has been to Auckland (about 45 per cent), Hawke's Bay claims the prize of having the largest percentage increase in the number of people moving from offshore to any part of New Zealand over the past year. The number of arrivals was 2085 for the year ended March, a 19 per cent lift on the year before.

The next largest increase was in the Bay of Plenty at 17.5 per cent, while in Auckland the increase was "only" 10 per cent.

We don't have the breakdown of where the arrivals into the Bay are coming from but it is likely a significant group is made up of Kiwis returning from Australia.

One prominent removal company we spoke to in the Bay, with operations throughout Australia, has been busy resettling Kiwi families from Queensland and Western Australia as the mining boom has ended.

At the national level, within the record figures released by SNZ last week, was a net annual gain of 1900 people moving from Australia to New Zealand - the highest net gain in 25 years.

Some economists are picking that this transtasman gain is about to turn as the Australian job market improves but, with increasing awareness of New Zealanders in Australia that they and their children are effectively second-class citizens (unless they apply and pass muster to become full Australian citizens), it is not clear that the tide will actually turn.

Many of the arrivals into the Bay will also be from the rest of the world - from Asian, European, Pacific Island, African, Latin American and North American nations.

Domestic and international research summarised by the NZIER suggests skilled immigrants, as they mainly are under New Zealand's points-based immigration system, provide businesses with new and complementary skills, increase innovation and entrepreneurship, and increase the potential for connectivity with the rest of the world.

The diversity in backgrounds of people moving to the Bay is to be celebrated but managing the supply-side pressures that these and other recent arrivals into the Bay bring is essential to prevent the risk that locals not yet on the property ladder get priced out of the market - and the inevitable resentment that would accompany such a scenario.

- Aaron Drew is chief investment officer with Hastings-based wealth management company Stewart Financial Group.