New Zealand’s migration trends since the Covid-19 pandemic
With New Zealand’s borders now open, we expect net migration to turn positive in the years ahead. While departing Kiwis tend to dominate the narrative, foreign arrivals will be the deciding factor.
Read full report here (PDF 414KB).
You say goodbye, I say hello.
- Our forecast remains for net migration to turn modestly positive again in the year ahead, settling at around 25,000 people a year over the longer term.
- In this article we delve into the components that make up the migration balance – how they performed during the pandemic, what’s happened since the border was reopened, and the outlook for the years ahead.
- While departures of New Zealanders tend to dominate the narrative, they are far from the most important group.
- Foreign arrivals have typically been the swing factor in net migration, and they will be once again now that the border has reopened.
After more than two years of Covid restrictions, New Zealand began to reopen its border to travellers from the end of February. While that was initially limited to New Zealanders returning home, it was soon extended to travellers from around the world, including both short-term visitors and longer-term migrants.
The prospect of the border reopening was met with predictions that the outflow of people would get worse in the year ahead, particularly due to young Kiwis who have been waiting for years to do their ‘overseas experience’. While our border rules didn’t actually prevent people from leaving, the uncertainty around being able to return home may have held some people back until now.
In contrast, our view has been that the worst is behind us, and that the reopening of the border would see a return to a positive balance in the coming years. Foreign arrivals tend to be the swing factor in the migration balance, and these flows had the most scope to rebound once the border was opened.
With the July figures released this week, we now have five months of data under our belts since the border started to reopen. And while the provisional data needs to be treated with caution, it appears to back our view. The balance has been improving since March – it’s still negative, but less than it was previously. Both departures and arrivals have picked up, but the latter has been stronger and has more room for further gains.
We discussed the outlook for migration as a special topic in our most recent Economic Overview. This article expands on that piece by reviewing the recent history of each of the components that make up the migration balance, and how that history informs our forecasts.
What’s happened so far?
Before the pandemic, New Zealand saw an annual net inflow of around 50,000 migrants, which was down from a peak of around 65,000 in 2016. That balance rose to around 90,000 people as arrivals surged higher in the months before the border closure in March 2020. However, many of them weren’t recorded as such at the time, but only in later revisions of the data. This suggests that much of this surge was unintentional – they were shorter-term visitors who ended up stuck in the country for more than a year and became classified as migrants.
With foreign arrivals largely cut off after March 2020, the balance of migrant flows fell sharply and had turned negative by early 2021. The current estimates suggest that the net outflow peaked at around 16,000 people in the year to February 2022. But again, these figures can be subject to sizeable revisions as more data becomes available. Based on the size of the revisions to date, that peak outflow could end up at 20-25,000 people by the time the data becomes final.
Despite the string of revisions, one finding has consistently held up: March 2022, the first month of the border reopening, marked the turning point. On a monthly basis, the net flow is still negative, but it’s less negative than it was the same time a year ago. That’s driven the pickup in the annual balance as shown in the chart above.
In the following charts, we’ve broken down the migration balance into four dimensions: by direction, and by citizenship (New Zealand and other). These charts show each of the flows on a monthly basis up until July.
One point to note about these charts is that before Covid, some of these flows had a strong seasonal pattern. With the restrictions on people movements since then, it’s not clear whether those patterns still apply. Consequently, the figures up to March 2020 are shown in seasonally adjusted terms, and are unadjusted from April 2020 onward. The exception is non- New Zealand departures, which we’ve adjusted for the usual outflow of overseas students at the end of the year.
New Zealand arrivals: Since the initial Covid lockdown in 2020 was lifted, New Zealanders have been returning home at a steady pace. Indeed, from mid-2020 to mid-2021 the pace of arrivals was close to normal levels, even with the limited availability of MIQ facilities on arrival. A reduction in MIQ spaces from the second half of 2021 may have been a more limiting factor. However, there hasn’t been a discernible lift in arrivals in the months since the isolation requirement was removed.
Non-New Zealand arrivals: Arrivals of Non-New Zealand citizens were the most restricted category during the pandemic, with limited exceptions such as essential workers. This category was also the slowest to be eased up, with the border not fully reopened to all sources (including international students) until the end of July.
However, even with the slow start, arrivals have been climbing rapidly and by July were already around two-thirds of their pre-pandemic average. The lift to date is likely to consist of Australians, seasonal workers and those on working holiday visas, with students set to show up in the August figures.
New Zealand departures: The stories of New Zealanders heading overseas are correct, and no doubt there is an element of pent-up demand that is likely to shine through in the coming months. What’s striking, though, is that there had been a sizeable outflow throughout the pandemic. Domestic lockdowns, rather than border restrictions, seem to have been the main inhibiting factor.
It’s important to note that ‘the OE’ accounted for only a small share of departures in the years before Covid; the majority of departures were to Australia. Kiwis have been able to enter Australia since October 2020, and it appears many have done so – at times, outflows of New Zealanders have been close to the pre-Covid pace.
Non-New Zealand departures: Departures of non-New Zealanders have continued at a steady pace over the last two years, as people have returned to be with family, or as their visas have expired. Indeed, the pool of people in the country on temporary visas has been depleted to the point that these outflows are likely to be lower than normal in the years ahead.
Finally, we need to keep in mind the relative importance of these groups – you may have noticed the differing axes on these charts. Plotting them all together shows that departures of New Zealanders, despite getting much of the attention in recent times, are nowhere near the most important driver of the migration balance.
Arrivals of Non-New Zealanders were by far the largest group in normal times, and they suffered the most when the border was closed. As such, they account for all (and more) of the turnaround in net migration compared to the pre-pandemic years. They also have the most scope for a rebound now that the restrictions have been lifted, compared to the other groups where the potential pent-up demand to travel has already been diffused to some degree.
So why do the outflows of New Zealanders dominate the narrative? Most likely it’s a form of availability bias. We see the people here who have been planning to leave; most of us don’t have the same degree of contact with the other groups that make up the balance.
Where to from here?
We expect net migration to turn positive again in the years ahead. Migrant flows could overshoot their pre-pandemic levels for a while, reflecting the demand to travel that has been pent-up over the last couple of years. But that applies in both directions, without necessarily dictating the balance.
The majority of flows of New Zealand citizens are between here and Australia, so relative job prospects will play a crucial part in the balance. Both countries are facing extremely tight labour markets at the moment. However, both are also expected to face a softening in demand in the years ahead as higher interest rates bite, so there isn’t a compelling case for one market over the other. We expect the net flow of New Zealanders to turn slightly negative in the years ahead, similar to what we saw in the few years before Covid.
As we noted earlier, foreign arrivals are likely to be the swing factor again as migrant flows resume. The Government’s migration policy ‘reset’ is a complicating factor here. The intended direction of policy is clear – less reliance on migrant labour than we saw in the years before Covid – but it’s hard to put a number on what this might mean in practice. We’re assuming a moderate rise in migrant inflows in the years ahead, with the net migration balance settling at around 25,000 per year. That’s below the Treasury’s forecast of a rise to around 40,000 people a year by 2026.
As a final note, we don’t expect that a return to positive net migration will do much to alleviate the overall labour shortages in the New Zealand economy. Migrants add to the supply of labour, but they also add to the demand for goods and services. So while migrant workers will certainly help to address skill shortages in certain sectors, they could add to the pressure on other sectors. Rebalancing supply and demand ultimately has to happen at the macroeconomic level, and that responsibility typically lies with monetary policy.
Stay informed with Westpac IQ
Get the latest reports straight to your inbox.
Related articles
Browse topics
Disclaimer
©2025 Westpac Banking Corporation ABN 33 007 457 141 (including where acting under any of its Westpac, St George, Bank of Melbourne or BankSA brands, collectively, “Westpac”). References to the “Westpac Group” are to Westpac and its subsidiaries and includes the directors, employees and representatives of Westpac and its subsidiaries.
Things you should know
We respect your privacy: You can view our privacy statement at Westpac.com.au. Each time someone visits our site, data is captured so that we can accurately evaluate the quality of our content and make improvements for you. We may at times use technology to capture data about you to help us to better understand you and your needs, including potentially for the purposes of assessing your individual reading habits and interests to allow us to provide suggestions regarding other reading material which may be suitable for you.
This information, unless specifically indicated otherwise, is under copyright of the Westpac Group. None of the material, nor its contents, nor any copy of it, may be altered in any way, transmitted to, copied of distributed to any other party without the prior written permission of the Westpac Group.
Disclaimer
This information has been prepared by the Westpac and is intended for information purposes only. It is not intended to reflect any recommendation or financial advice and investment decisions should not be based on it. This information does not constitute an offer, a solicitation of an offer, or an inducement to subscribe for, purchase or sell any financial instrument or to enter into a legally binding contract. To the extent that this information contains any general advice, it has been prepared without taking into account your objectives, financial situation or needs and before acting on it you should consider the appropriateness of the advice. Certain types of transactions, including those involving futures, options and high yield securities give rise to substantial risk and are not suitable for all investors. We recommend that you seek your own independent legal or financial advice before proceeding with any investment decision. This information may contain material provided by third parties. While such material is published with the necessary permission none of Westpac or its related entities accepts any responsibility for the accuracy or completeness of any such material. Although we have made every effort to ensure this information is free from error, none of Westpac or its related entities warrants the accuracy, adequacy or completeness of this information, or otherwise endorses it in any way. Except where contrary to law, Westpac Group intend by this notice to exclude liability for this information. This information is subject to change without notice and none of Westpac or its related entities is under any obligation to update this information or correct any inaccuracy which may become apparent at a later date. This information may contain or incorporate by reference forward-looking statements. The words “believe”, “anticipate”, “expect”, “intend”, “plan”, “predict”, “continue”, “assume”, “positioned”, “may”, “will”, “should”, “shall”, “risk” and other similar expressions that are predictions of or indicate future events and future trends identify forward-looking statements. These forward-looking statements include all matters that are not historical facts. Past performance is not a reliable indicator of future performance, nor are forecasts of future performance. Whilst every effort has been taken to ensure that the assumptions on which any forecasts are based are reasonable, the forecasts may be affected by incorrect assumptions or by known or unknown risks and uncertainties. The ultimate outcomes may differ substantially from any forecasts.
Conflicts of Interest: In the normal course of offering banking products and services to its clients, the Westpac Group may act in several capacities (including issuer, market maker, underwriter, distributor, swap counterparty and calculation agent) simultaneously with respect to a financial instrument, giving rise to potential conflicts of interest which may impact the performance of a financial instrument. The Westpac Group may at any time transact or hold a position (including hedging and trading positions) for its own account or the account of a client in any financial instrument which may impact the performance of that financial instrument.
Author(s) disclaimer and declaration: The author(s) confirms that (a) no part of his/her compensation was, is, or will be, directly or indirectly, related to any views or (if applicable) recommendations expressed in this material; (b) this material accurately reflects his/her personal views about the financial products, companies or issuers (if applicable) and is based on sources reasonably believed to be reliable and accurate; (c) to the best of the author’s knowledge, they are not in receipt of inside information and this material does not contain inside information; and (d) no other part of the Westpac Group has made any attempt to influence this material.
Further important information regarding sustainability-related content: This material may contain statements relating to environmental, social and governance (ESG) topics. These are subject to known and unknown risks, and there are significant uncertainties, limitations, risks and assumptions in the metrics, modelling, data, scenarios, reporting and analysis on which the statements rely. In particular, these areas are rapidly evolving and maturing, and there are variations in approaches and common standards and practice, as well as uncertainty around future related policy and legislation. Some material may include information derived from publicly available sources that have not been independently verified. No representation or warranty is made as to the accuracy, completeness or reliability of the information. There is a risk that the analysis, estimates, judgements, assumptions, views, models, scenarios or projections used may turn out to be incorrect. These risks may cause actual outcomes to differ materially from those expressed or implied. The ESG-related statements in this material do not constitute advice, nor are they guarantees or predictions of future performance, and Westpac gives no representation, warranty or assurance (including as to the quality, accuracy or completeness of the statements). You should seek your own independent advice.
Additional country disclosures:
Australia: Westpac holds an Australian Financial Services Licence (No. 233714). You can access Westpac’s Financial Services Guide here or request a copy from your Westpac point of contact. To the extent that this information contains any general advice, it has been prepared without taking into account your objectives, financial situation or needs and before acting on it you should consider the appropriateness of the advice.
New Zealand: In New Zealand, Westpac Institutional Bank refers to the brand under which products and services are provided by either Westpac (NZ division) or Westpac New Zealand Limited (company number 1763882), the New Zealand incorporated subsidiary of Westpac ("WNZL"). Any product or service made available by WNZL does not represent an offer from Westpac or any of its subsidiaries (other than WNZL). Neither Westpac nor its other subsidiaries guarantee or otherwise support the performance of WNZL in respect of any such product. WNZL is not an authorised deposit-taking institution for the purposes of Australian prudential standards. The current disclosure statements for the New Zealand branch of Westpac and WNZL can be obtained at the internet address www.westpac.co.nz .
Singapore: This material has been prepared and issued for distribution in Singapore to institutional investors, accredited investors and expert investors (as defined in the applicable Singapore laws and regulations) only. Recipients of this material in Singapore should contact Westpac Singapore Branch in respect of any matters arising from, or in connection with, this material. Westpac Singapore Branch holds a wholesale banking licence and is subject to supervision by the Monetary Authority of Singapore.
U.S.: Westpac operates in the United States of America as a federally licensed branch, regulated by the Office of the Comptroller of the Currency. Westpac is also registered with the US Commodity Futures Trading Commission (“CFTC”) as a Swap Dealer, but is neither registered as, or affiliated with, a Futures Commission Merchant registered with the US CFTC. The services and products referenced above are not insured by the Federal Deposit Insurance Corporation (“FDIC”). Westpac Capital Markets, LLC (‘WCM’), a wholly-owned subsidiary of Westpac, is a broker-dealer registered under the U.S. Securities Exchange Act of 1934 (‘the Exchange Act’) and member of the Financial Industry Regulatory Authority (‘FINRA’). In accordance with APRA's Prudential Standard 222 'Association with Related Entities', Westpac does not stand behind WCM other than as provided for in certain legal agreements between Westpac and WCM andobligations of WCM do not represent liabilities of Westpac. This communication is provided for distribution to U.S. institutional investors in reliance on the exemption from registration provided by Rule 15a-6 under the Exchange Act and is not subject to all of the independence and disclosure standards applicable to debt research reports prepared for retail investors in the United States. WCM is the U.S. distributor of this communication and accepts responsibility for the contents of this communication. Transactions by U.S. customers of any securities referenced herein should be effected through WCM. All disclaimers set out with respect to Westpac apply equally to WCM. If you would like to speak to someone regarding any security mentioned herein, please contact WCM on +1 212 389 1269. Investing in any non-U.S. securities or related financial instruments mentioned in this communication may present certain risks. The securities of non-U.S. issuers may not be registered with, or be subject to the regulations of, the SEC in the United States. Information on such non-U.S. securities or related financial instruments may be limited. Non-U.S. companies may not be subject to audit and reporting standards and regulatory requirements comparable to those in effect in the United States. The value of any investment or income from any securities or related derivative instruments denominated in a currency other than U.S. dollars is subject to exchange rate fluctuations that may have a positive or adverse effect on the value of or income from such securities or related derivative instruments.
The author of this communication is employed by Westpac and is not registered or qualified as a research analyst, representative, or associated person of WCM or any other U.S. broker-dealer under the rules of FINRA, any other U.S. self-regulatory organisation, or the laws, rules or regulations of any State. Unless otherwise specifically stated, the views expressed herein are solely those of the author and may differ from the information, views or analysis expressed by Westpac and/or its affiliates.
UK and EU: The London branch of Westpac is authorised in the United Kingdom by the Prudential Regulation Authority (PRA) and is subject to regulation by the Financial Conduct Authority (FCA) and limited regulation by the PRA (Financial Services Register number: 124586). The London branch of Westpac is registered at Companies House as a branch established in the United Kingdom (Branch No. BR000106). Details about the extent of the regulation of Westpac’s London branch by the PRA are available from us on request.
Westpac Europe GmbH (“WEG”) is authorised in Germany by the Federal Financial Supervision Authority (‘BaFin’) and subject to its regulation. WEG’s supervisory authorities are BaFin and the German Federal Bank (‘Deutsche Bundesbank’). WEG is registered with the commercial register (‘Handelsregister’) of the local court of Frankfurt am Main under registration number HRB 118483. In accordance with APRA’s Prudential Standard 222 ‘Association with Related Entities’, Westpac does not stand behind WEG other than as provided for in certain legal agreements (a risk transfer, sub-participation and collateral agreement) between Westpac and WEG and obligations of WEG do not represent liabilities of Westpac.
This communication is not intended for distribution to, or use by any person or entity in any jurisdiction or country where such distribution or use would be contrary to local law or regulation. This communication is not being made to or distributed to, and must not be passed on to, the general public in the United Kingdom. Rather, this communication is being made only to and is directed at (a) those persons falling within the definition of Investment Professionals (set out in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”)); (b) those persons falling within the definition of high net worth companies, unincorporated associations etc. (set out in Article 49(2)of the Order; (c) other persons to whom it may lawfully be communicated in accordance with the Order or (d) any persons to whom it may otherwise lawfully be made (all such persons together being referred to as “relevant persons”). Any person who is not a relevant person should not act or rely on this communication or any of its contents. In the same way, the information contained in this communication is intended for “eligible counterparties” and “professional clients” as defined by the rules of the Financial Conduct Authority and is not intended for “retail clients”. Westpac expressly prohibits you from passing on the information in this communication to any third party.
This communication contains general commentary, research, and market colour. The communication does not constitute investment advice. The material may contain an ‘investment recommendation’ and/or ‘information recommending or suggesting an investment’, both as defined in Regulation (EU) No 596/2014 (including as applicable in the United Kingdom) (“MAR”). In accordance with the relevant provisions of MAR, reasonable care has been taken to ensure that the material has been objectively presented and that interests or conflicts of interest of the sender concerning the financial instruments to which that information relates have been disclosed.
Investment recommendations must be read alongside the specific disclosure which accompanies them and the general disclosure which can be found here. Such disclosure fulfils certain additional information requirements of MAR and associated delegated legislation and by accepting this communication you acknowledge that you are aware of the existence of such additional disclosure and its contents.
To the extent this communication comprises an investment recommendation it is classified as non-independent research. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and therefore constitutes a marketing communication. Further, this communication is not subject to any prohibition on dealing ahead of the dissemination of investment research.