Migration rates to impact construction activity
The population growth of New Zealand has seen fluctuation in previous years as various factors impact migration. Officials are estimating that the impact of this on the level of population in New Zealand will be making itself more and more present as rates of immigration decline.
Changes in the consideration of whether a newcomer to New Zealand is a short-term visitor or a migrant have likely had an impact on the fluctuation of these statistics, according to Statistics NZ. Following these bureaucratic changes and some ensuing growing pains surrounding its implementation, Statistics NZ has come forward with estimated figures on the population growth in New Zealand derived from migrants.
From the commencement of last year to May 2019, the estimated population gain from migrants to New Zealand was 46,100 (approximately 9400 below initial calculations). And from that month onwards, migration numbers have only continued to decline.
Fewer Kiwis Could Signify Fewer Construction Opportunities
The continued focus on construction activity over recent years alongside the lack of population growth speaks ominously. The continued decrease in influx from migratory Kiwis has many in construction and expansion industries concerned for the economic impact.
Westpac bank has stated their expectations for net migration to fall throughout 2020, along with their concerns for the Kiwi home building industry. Westpac senior economist Satish Ranchhod noted that “while a large number of houses will still be needed to address earlier underbuilding, we think a peak in home building is approaching.”
For those wishing to buy the new homes being churned out at swift rates despite the cooling population growth, the home building and property sales markets should expect disruption in the near future. “The chances of overbuilding and a classic boom-bust cycle have increased, especially in Auckland,” said Ranchhod.