Tony Alexander: Returning Kiwis won’t lift house prices

ANALYSIS: The borders are now fully open to Kiwis returning from anywhere. For the past two years many people have been of the opinion that the one million Kiwis offshore would love to be here right now. On that basis some people have bought properties and sections before our offshore Kiwis can get here and do their own buying.

The trouble is, while for the next few weeks we will at last see images of some extremely happy New Zealanders finally able to return freely to their own country, this doesn’t mean our housing market is about to receive a new upward boost.

First, it pays to note that one survey late last year found 42% of the people entering the MIQ queue to get into New Zealand were already here. They just wanted to leave then come back.

Second, we Kiwis have always travelled back home to visit friends and families during the years we are offshore. The bulk of people coming in the next few months will be doing just that for a few days or weeks, before going back to their offshore home.

Third, we Kiwis go offshore for income-earning reasons largely. It is not reasonable to expect that when labour markets are exceptionally tight offshore and opportunities for advancement the best in a generation, that tens of thousands of Kiwis will forsake that opportunity. Doing so involves returning here for higher house prices, a higher cost of living, and much lower wages.

Many do this because they want the lifestyle we offer, especially for bringing up their children. But this lifestyle probably doesn’t involve leaving their offshore apartment to live in an Auckland townhouse.

Fourth, the sort of lifestyle we offer can be achieved with far higher income in Australia and that is probably where a good number of Kiwis in the northern hemisphere may head if they are intent on going back below the equator.

Fifth, we Kiwis for generations have gone to Australia to seek our fortunes and to test ourselves when the Australian economy is strong and demand for our labour high. That demand currently is extremely good and it is highly likely that a great number of young to mid-career Kiwis will head across to the eastern coast of Australia.

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