After several years of net migration losses, Aotearoa-New Zealand’s population is again on the rise, and pundits are speculating what it means for residential property values.

Can we expect to see property values rise as the population increase places pressure on our housing supply?

The Government has made various changes to its migration settings including greater occupational scope for the Straight-to-Residence Visa criteria. This visa allows applicants from selected disciplines to live, work, and study in New Zealand, along with their partners and dependent children up to 24 years of age, providing one of the quickest pathways to New Zealand residency for many migrants.

A sharp rise in migration that’s forecast to see population growth rise from just 0.5 percent at the end of 2022 to more than two percent by the close of this year – the fastest New Zealand has seen in decades. Data from Statistics New Zealand shows average weekly rents are up 3.8 percent year-on-year as landlords anticipate greater demand from an increase in new migrants seeking homes.

This will continue to pressure the housing supply. If persistent, New Zealand could be facing another housing shortage by this time next year resulting in a supply outweighing demand - and a potential value uplift of residential assets.

With sales activity picking up, buyer classification data shows the influence of foreign capital, as migrants now make up around 13 percent of New Zealand’s recent house hunters.

In short, migration will help to put a floor underneath the residential housing market, with values set to move upward from here, though we’re unlikely to see a return to the previous cycle’s market high.

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