Net loss of Kiwis to Australia falls to 27,900 as economic gap begins to narrow

HouGarden New Zealand, 15 October — The figures, which measure net migration loss — the number of people leaving minus those returning — show the trans-Tasman outflow is easing, though New Zealand continues to lose more people to Australia than it gains back.

Nick Brunsden, lead demographer at Infometrics, an independent New Zealand economic research firm, told RNZ's Morning Report that the country has long functioned as what he calls an 'exporter of people', but recent years had pushed the numbers unusually high.

'We're starting to see that number come down,' Brunsden said. 'We're still losing more Kiwis than we're getting back, and that's probably going to stay, but it is just getting that little bit better.'

Brunsden said employment remains the primary driver of cross-Tasman movement, with Australia's unemployment rate running about one percentage point lower than New Zealand's. That gap, he said, is beginning to close.

'There's about a percentage point difference between the unemployment rates of each country, which means that all else being equal, you're going to have better job opportunities in Australia. But that gap's just starting to close. We're expecting it to be more like 0.5 percent apart within the next one to two years,' he said.

A smaller unemployment gap would not reverse Australia's relative advantage, but Brunsden said historical patterns show even a modest narrowing tends to reduce departures and encourage some Kiwis already in Australia to return. 'Australia will still be the stronger country, but when that unemployment rate changes, that seems to encourage fewer people to leave for Australia, and it also encourages a few Kiwis to come back,' he said.

The composition of those leaving has also shifted in ways that could make a full reversal harder to achieve. Brunsden noted a marked rise in departures among children under 15 and adults in their early thirties — the age group most likely to be moving with young families.

'We have seen quite strong departures of under-fifteens and people in the early thirties over the last couple of years, which is a little bit different,' he said. 'That does suggest people were taking their families to Australia, and so perhaps those people might be a bit more sticky, they might be a bit more settled in Australia and a bit less likely to come back even as New Zealand's labour market improves.'

Brunsden linked the family migration wave to cost-of-living pressures that built up during New Zealand's recent period of high inflation. 'I think we had some quite high inflation over the last few years, that's encouraged people to look a bit closer at what the cost of living that they're facing is, and I think that's encouraged a few more of those families over to Australia, certainly in the last two or so years,' he said.

Australia's economy avoided the same downturn, but Brunsden argued that timing may now work in New Zealand's favour. 'They haven't faced the same sort of downturn that we have. Their Reserve Bank has been setting interest rates at a higher level — they've been trying to tame things a bit more aggressively than our Reserve Bank. So that means that at the point that we're starting to recover, they're potentially heading into a little bit of a softer period. So that mismatch in timing is potentially to our advantage,' he said.

For New Zealand's property sector, a sustained slowdown in net population loss would gradually support housing demand and reduce vacancy pressure in the rental market, particularly in cities that have seen tenant numbers shrink alongside the outflow. The figures do not yet point to a reversal, but the downward trend in net losses is the clearest sign in several years that the migration tide may be turning.