Pete Wargent blogspot

CEO AllenWargent Property Buyers, & WargentAdvisory (institutional). 6 x finance author.

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'I've been investing 40 years yet still learn new concepts from Pete; one of the finest young commentators' - Michael Yardney, Amazon #1 bestseller.

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Monday, 21 March 2016

Kia pai tō rā!

Student visa boom

A squizz at the February international travel and migration figures from Statistics New Zealand showed that, like Australia, New Zealand continues to experience heaps strong population growth, largely due to a mean boom in student visas (albeit on much a smaller scale).

Seasonally adjusted permanent and long-term migration figures showed another hard out net gain of 6,100 migrants in February 2016, the same as the mint result recorded in January.

And I think that's enough of the underwhelming attempt at slang.

A key driver of the strong migration was a 12.4 per cent year-on-year surge in student visas. Students made up 23 percent of all migrant arrivals, with most of these hailing from India (10,100) and China (5,800).

The increase in year-on-year migrant arrivals was led by Australia (up by 2,200 to 25,800, largely comprising Kiwis returning home) and China (up by 2,000 to 11,800).

Net migration from Oz slows to 100

Annual net migration from Australia of 1,600 migrants was the highest annual figure since 1991 and the fifth month on the bounce to show an annual net gain. 

However, unsurprisingly the trend is now slowing, and February 2016 showed a seasonally adjusted net gain of just 100 migrants from Australia, down from 300 in January.

While Australia's unemployment rate has been in a 28 month downtrend the New Zealand economy is evidently now weakening, with the dairy industry racking up alarming losses and economists now expecting at least two further interest rate cuts. 

As such the net monthly migration from Australia will doubtless eventually slow from 100 to zero or below in due course. 

Short term departures to Australia surge

New Zealand residents departed on a chocka block 2.42 million overseas trips in the year to February, up by 137,500 or 6 percent from one year earlier.

The biggest changes in New Zealand resident departures by country were in departures for Australia, which were up by 41,800 to 1.14 million.

Aussie recession? Not even

A few blog readers have kindly emailed to advise that with Kiwis returning home this indicates that Australia is "in recession", or perhaps something akin to it. 

Of course, there is no such recession. 

In fact, Australia's economy grew by an acclaimed 3 per cent in 2015, which is about as good as it gets in a post-financial crisis world.

Whether a net 25, 50 or 100 Kiwis return home each month won't make much difference to this fact, - by far the greatest migration into Australia is from Asia these days - nor will China's wobbly share market which is back above 3,000 today, and nor will iron ore futures, which are now at their highest level since June 2015.

The biggest risk hanging over the Aussie economy is the mining investment cliff, although Commonwealth Bank estimates that even this has almost come and gone at about 74 per cent completed.

I wouldn't be at all surprised to see Australia's population  accelerating to around 350,000 in 2016. In any case, the New Zealand economy is notably weakening, so the population trend towards NZ migration is all but ready to be laid on the hāngi.

Furthermore between 60,000 and 100,000 New Zealanders living and working in Australia will now become eligible for Australian citizenship following a meeting between Prime Ministers Turnbull and Key.


It is National Harmony Day today in Australia. 

Around 45 per cent of Australians were born overseas or have at least one parent who was, including many New Zealanders, of course.

Tu Meke!