Mortgage News December 06, 2019
Population Growth & the Housing Shortage

The New Zealand population continues to grow, despite a sharp increase in the number of Kiwis leaving the country. While population growth is still putting pressure on the housing market, recent reports of a housing shortage seem to have been overinflated. Real population growth over the last 5 years has been significantly lower than forecast by Statistics New Zealand, with the housing gap real but much smaller than first thought. 

According to recent data from Statistics New Zealand, the net loss of New Zealand citizens has been on a sharp upwards trend over the last three years. The number of Kiwis leaving the country in the year ending August 2019 was twice the number who left in 2018 and three times the number who left in 2017. 13,577 New Zealand citizens departed this year, compared to 7,265 the year before. While New Zealand has always struggled with the loss of its own citizens, a weak national economy and increasing globalisation have both been blamed for this recent increase. 

Despite this worrying trend, the overall New Zealand population still grew by 53,810, which is 9.4% higher than it was in 2018. Much of this growth was due to migration, with 149,834 people arriving in the country on a long-term basis in the year ending August. This is much higher than the 139,095 people who entered in 2018, with an increase of 10,739 or 7.7%. More people also departed on a long-term basis, however, at 96,025 compared to 89,898 or -6.8%. 

China is the biggest source of new migrants with a net gain of 10,406 from the mainland and 699 from Hong Kong. China is followed by South Africa with 9,438, India with 8,345, the Philippines with 7,055, and Australia with 4,989. Many of these migrants are making the choice to become New Zealand citizens, with a net gain of 67,387 citizens from other countries recorded in the year ending August. This figure was a significant increase of 19.3% compared to the previous 12 months.

Census data just released continues to raise questions about the real state of population growth in the country. According to a report by Colliers International, growth numbers are much lower than the original estimates, with this divergence shedding new light on the state of the housing crisis. While the forecast population increase over the last five years was 643,500, New Zealand only increased from 4.24 million people in 2013 to 4.7 million in 2018, which is a population increase of 457,500.

According to the original figures from Statistics New Zealand, an additional 238,000 homes were needed between 2013-2018 to provide full housing coverage. According to Colliers, however, the number should really have been 169,000 homes, which is not too far off the 120,000 dwelling consents issued over the five year period. Even Auckland is doing much better than first thought, with the actual number of new homes needed almost half the original estimate at 54,000 compared to 97,000. While the housing shortage is a reality, it is looking much less pronounced than originally thought.

 

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