Immigration¬†is set to hit record levels, pushing up house prices over the coming year, but Prime Minister John Key believes immigrants’ skills are needed and enough houses are “in the pipeline” in Auckland to meet the influx.
In their monthly update to ministers yesterday, Treasury officials said net permanent and long-term (PLT) migration in the year ending March was “likely to exceed our [December] Half Year Update forecast of a peak of 52,400″.
Inflows were expected to start easing in the first half of this year, and the impact on house prices and household wealth appeared more subdued in this cycle, possibly because of the concentration of 20-34-year-olds in the numbers.
Key said there was no question immigration has some impact on housing.
“Generally, the Reserve Bank takes the view that net migration is positive for the economy but has some spill-over implications.”