ASB predicts migration will stay strong for the next three years, sending population to 5 million
New Zealand could still be gaining close to 60,000 people a year from migration in three years time, new ASB forecasts claim, sending the population above 5 million.
On Tuesday figures from Statistics NZ showed that New Zealand recorded a fifth straight month of net migration gains of more than 6000 people.
The gain in the year to February 28 hit a new all time high of 71,333.
A surge in the number of New Zealanders returning from overseas, coupled with a slowdown in the number of Kiwis moving to Australia, has seen New Zealand notch up almost continuous record migration gains for more than two years.
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The gains have defied the predictions of the Government and Treasury, and a changing mix of new migrants has economists at ASB warning migration will tail off very slowly over the next three years.
In 2015 and 2016 the migration gains were boosted by record numbers of international students, after visa rules were changed to allow the students to work in paid employment for up to 20 hours a week.
But as the number of students has abated, it has been more than replaced by a surge in the number of long term arrivals coming to New Zealand on work visas.
ASB economist Daniel Snowden said people coming on work visas were by their nature likely to stay longer and spend more than students, who tended to return home at the end of their studies.
ASB now forecasts that net migration would hit 72,000 in the year to March 31, and would not drop below an annual gain of 70,000 until the second half of 2018.
From then on the gains would decline "very slowly", Snowden said, to around 55,000-60,000 by the end of 2019.
If correct, coupled with recent gains in the existing population, the figures suggest New Zealand's population would hit 5 million in 2019.
Previous recent migration booms had tended to fall away quite quickly after reaching a peak, but Snowden said the recent gains were moving to a different pattern.
"The make up of arrivals [is diverse]. It's not like we're getting streams of people from one country and that tap will inevitably be turned off," Snowden said.
"People are coming from all over the world. We're still getting lots of student coming...lots of people on work visas, returning Kiwis have trailed off over the last couple of months, but have been quite a good source of net migrants.
"So it's a real mix of people coming for different reasons. It's that that makes us think we're not going to get that sudden drop off [of previous cycles], because if one factor changes and falls away, you've still got four or five groups of people coming."
New Zealand's population is currently estimated to be around 4.77 million according to Statistics NZ, with population growth hitting a 40 year high in 2016 as migration levels boomed.
Westpac acting chief economist Michael Gordon said the gain for the month of February alone was down around 400 on January, with a small increase in the number of non-New Zealand citizens moving overseas.
"In contrast, there is no sign yet of a pickup in departures of New Zealanders," Gordon said.
"This most likely reflects the continued softness in the Australian jobs market."
Gordon predicted net migration would continue at strong levels for some time, "with New Zealand's positive economic story, including its labour market, making us an attractive destination".