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Migration figures a vote of confidence in the Wellington Region

5 May 2017

PWT Wellington City Signs Woodward04

The recent net increase in migration to Wellington is good news, and a vote of confidence in the region’s economy, but - we need to invest to avoid pressure on infrastructure.

Hidden insights

Hidden in the recent Statistics New Zealand data released on net migration, was positive news for the Wellington region.

The figures showed, that in the last year (12 months to March 2017), the Wellington region received net inward migration of 3,914 people from overseas (includes returning New Zealanders). 

The increased migration into the Wellington region is a vote of confidence in the local economy. Fewer people are choosing to leave and more are settling here because they see an economic future in the region.

This will also help:

  • to fill skill gaps
  • stimulate economic activity
  • bring in capital and businesses
  • improve our international connectivity
  • enable critical mass for infrastructure and other services
  • keep the population young
  • add to Wellington's vibrancy

Room to grow

While immigration has been increasing nationally, Wellington has been slower to record an increase in net migration to the region.

Even now the Wellington region’s share of the increase in the national net migration is 5.4% – lower than what would be expected given the region makes up 10.5% of the country’s population, but it is growing steadily.

By way of comparison, Auckland’s share was just under half (49.7%) of the national net increase in migration.

What the figures highlight, is the challenge facing New Zealand is not that current migration is too high, but that it's too fast, and too concentrated in places like Auckland.

Spread benefits across New Zealand

There is little disagreement that the pressure migration is putting on Auckland’s housing market and infrastructure is detrimental for the city, and the country as a whole in the short term.

We need to:

  • look at ways to spread the benefits of migration across the country; which would help mitigate the downsides of migration that are being felt disproportionally in Auckland. 
  • promote centres outside of Auckland as viable destinations; for New Zealanders returning home, and non-New Zealanders who are choosing to live here.

Tweak migration points system

Spurred by unaffordable house prices and congested roads, a low number of migrants are already opting to relocate elsewhere in New Zealand. But, a tweak of the government’s migration points system could provide an additional nudge to encourage skilled migrants and entrepreneurs to choose to settle outside of Auckland.

While Auckland struggles with too much growth, many parts of New Zealand are facing shrinking and aging populations. These areas could benefit from new migrants, whether from other parts of New Zealand or beyond.

Given Wellington’s strengths, including being named the world's most liveable city by Deutsche Bank, and the fact it is an excellent alternative to Auckland for a similar range of skill sets, it is no surprise that Wellington is now reaping the benefits of increased migration.

Focus on infrastructure

Right now, we are fortunate the increasing net-number of people migrating to the region is not placing the same level of demand on our infrastructure, as it is in Auckland.

But, as rising house prices in the region indicate, this could change. So, however the election year 'migration debate' plays out nationally, in our region, we should be focused on ensuring we are investing in housing and other infrastructure. The Wellington City Council already have this underway in their Wellington Urban Growth plan.

Focusing on infrastructure investment, will ensure migration continues to benefit the local economy; by sustainably increasing the population, reversing the trend of an ageing population, creating more international connections and ensuring we have a critical mass of skilled workers here.

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