New Zealand is a land fuelled by immigration, with population growth from "outside" having a strong influence on property prices and economic figures. The COVID-19 pandemic has put a sharp stop on immigration, with a decline in international arrivals set to influence every aspect of the economic recovery. While the trans-Tasman travel bubble looks set to go ahead early next year, nations other than Australia are unlikely to see New Zealand shores for some time. In a land dependent on growth from tourism and population-led demand, this could have serious implications for the future of the nation.
According to Statistics NZ, population growth across the country has dropped by a massive 90% compared to a year ago. There were just 2618 arrivals in October for a net gain of 884, compared to 10,224 the year before. Back in March 2020, the immigration tap was basically turned off as New Zealand closed its borders. While a similar situation occurred in many other nations, the lack of international movement has been much more severe in Australia, New Zealand, and other nations wishing to protect their low virus numbers.
This represents a significant shift from the past few decades, where new arrivals have helped to fuel the New Zealand economy and culture. The nation has been through three distinct periods of population growth and migration since 2000, all of which look very different to the current environment. During the first period between the turn of the century and the global financial crisis (GFC), the New Zealand population grew by 407,200, with net migration gains contributing 45.5% to this growth. After the GFC between 2008 and 2013, population growth was much more modest, at 191,200 and 5% respectively. During the third period from 2014 to 2019, which was abruptly cut off by the pandemic, New Zealand saw major population growth at 480,000 and 65% respectively.
As you might imagine, the drop from these figures to virtually zero is likely to have a major impact. A future decline in temporary migration may also be a significant factor, with roughly 300,000 people here on temporary work visas and study visas prior to the pandemic. As if that wasn't enough to deal with, New Zealand will also face population and demographic pressures from declining fertility rates and the reality of an ageing population. Delayed fertility is likely due to the uncertainty associated with COVID-19, and almost a quarter of all Kiwis will be over 65 years of age by the 2030s.
While no-one knows exactly what's ahead, the government has made some clear moves in an attempt to gain some certainty. The current stay period for temporary workers and student visa holders has been extended under the COVID-19 Public Health response Act, as the world waits to see what impact the virus and vaccination response will have. Currently, returning Kiwis represent the vast majority of new arrivals, with 45,481 New Zealanders coming home over the last 12 months for a net gain of 16,945. This is a strange situation for a country that has become accustomed to its citizens leaving, and an economic lifesaver under the current conditions.
