Returning Kiwis help lift hope for economy

Immigration to NZ has shored up housing demand and retail figures. Photo / Amos Chapple

Annual immigration to the end of June reached the highest level in two years, adding to hopes of recovery from recession.

The number of permanent migrant arrivals exceeded departures by 12,515 in the 12 months to June 30, boosted by a rising number of returning New Zealanders, according to Statistics New Zealand figures issued yesterday.

That's up from 11,202 in the year to May and is the most since the 12 months to February 2007.

"It has much to do with the current global recession and returning expats, and the numbers departing to Australia has been significantly reduced," said Richard Howard, chairman of the New Zealand Association for Migration and Investment.

"It is not the normal immigration trend, but is driven by the current economic climate, which has resulted in Kiwis finding it more secure to be returning home to New Zealand."

Economists say the figures are helping to underpin the housing market and retail sector.

"Rising net migration will help provide a floor on demand for housing and retail spending at a time when these sectors are cyclically very weak," said ASB economist Jane Turner.

Reserve Bank Governor Alan Bollard said last month a recovery in immigration could bolster spending and help the economy grow in the final quarter of the year, which would end seven quarters of recession.

"Migration is a positive for the economy and will provide support to both the housing market and spending," said ANZ National economist Philip Borkin.

But Mr Howard warned it would also put pressure on the struggling job market.

Day-to-day things were not as bad as in countries such as Britain and Ireland, Mr Howard said, but many returning Kiwis still found it hard to get jobs.

About 50,000 New Zealanders are now on the unemployment benefit, almost three times the 17,710 at the same time last year.

The Statistics NZ report - International Travel and Migration - monitors the pace of migration and shows the numbers of those leaving or arriving for at least a year.

In the year to June, 1800 more New Zealanders came home than during the same period the previous year, while almost 6000 fewer left the country.

The number of non-New Zealanders coming and going remained fairly static over the year.

The number of New Zealanders who returned home in June alone was more than 1200 - almost 200 more than for the same month in 2008.

The number of New Zealanders emigrating was the second lowest since January 2004.

In its most recent quarterly economic forecasts Westpac expects net migration gains of 25,000 this year and next year, underpinning the housing market and the broader economy.

Historically there has been a close relationship between net migration and house prices, though it was probably exaggerated by the fact that both tended to rise when the economy was doing well for other reasons, it said.

This time migration is rising when other economic drivers are weak - "so it will be a case of strong migration preventing house price declines that would otherwise have occurred, rather than generating massive house price increases", the forecast said.

Meanwhile, the number of tourist arrivals declined for a second month in June in an industry which makes up about 10 per cent of the New Zealand economy.

* In and out

NZers going overseas - year to June:

2005 47,385

2006 47,774

2007 51,842

2008 58,327

2009 52,484

NZers coming home - year to June:

2005 24,962

2006 24,040

2007 23,472

2008 23,036

2009 24,825

- ADDITIONAL REPORTING: BLOOMBERG