Net inward migration in the year ending June 2009 was 12,565 people. This is a 9,000 net increase since our last trough at 3,500 net inflow for the year to November 2008.

The net increase has been growing strongly since January-February this year and the seasonality pattern indicates that it will continue growing for at least the next five or six months. We expect the net inflow to be about 17,000 people for the year ending November 2009. This is 17,000 more people, perhaps 6,000 to 7,000 households who need a dwelling with a set of appliances, a car, perhaps a mortgage and so on.

The nature of the change is also important for its economic effect. The main change has been a reduction of 6,000 in the number leaving for Australia, and of 2,000 in the number leaving for Europe and the Americas. The number arriving from Australia has increased by about 600. As to be expected from that pattern of migration, the main changes in the last twelve months have been in migration patterns of New Zealand citizens. So there are fewer young people and families leaving for Australia, fewer young people leaving for the northern hemisphere, and more Kiwis migrating back from Australia.

The effect of this turnaround in migration is already being seen in the reduction in house listings. It will also be increasing the available labour force, and in the short term will be adding to the number unemployed. This will be part of the cause of the expected increase in the unemployed to be announced in the Household Labour Force Survey later this week. However, as the larger population increases the level of consumer demand and the productive capacity of the economy in the medium term, the net effect on the labour market should be positive.