Migration to New Zealand appears to have hit a peak, and it is expected a decline will begin shortly as fewer foreigners arrive in the country.
Migration for the year to May reached a record 68,420 and is expected to peak at about 68,500 next month, before starting to decline.
The arrival of migrants has been a double-edged sword for the economy, putting further pressure on the already heated housing market but also delivering increased demand for goods and services.
Data released by Statistics New Zealand yesterday said seasonally adjusted figures showed a net gain - there were 5500 more arrivals than departures in May.
There was a declining trend in monthly net gain of migrants, while the annual net gain was still breaking records.
‘‘Since reaching a peak of 6200 in November 2015, the seasonally adjusted net gain in migrants has averaged 5700 a month.
‘‘This reflects a declining trend in monthly net gains in migration,'' SNZ said.
If the recent trend continued, annual net migration would reach a ‘‘cycle peak'' of about 68,500 next month then start declining, Westpac chief economist Dominick Stephens said.
The main driver of the reduction in net migration in May was a reduction in foreigners arriving, on both work visas and student visas, while the number of New Zealanders leaving remained low and stable, he said.
‘‘We expect annual net migration to fall rapidly over the coming year or two, as foreigners who arrived on temporary work or student visas over the past three years begin to depart, and as the recovering Australian labour market begins to attract New Zealanders across the Tasman,'' Mr Stephens said. However, he noted even if net migration dropped away from its peak, it would still be very high by historical standards.
ASB economist Daniel Snowden also said there was ‘‘some evidence'' migration inflows could be close to peaking, even though net migration was continuing to run at record levels.
‘‘We expect inflows from Australia to slow as the Australian labour market continues its recovery.
‘‘This migration boom has been providing support to the New Zealand economy via increased demand for goods and services, but has also placed strain on New Zealand's 's already-tight housing market,'' Mr Snowden said.
