The New Zealand Housing Crisis – what does it mean for migrants to New Zealand?
Yesterday the Governor of the Reserve Bank publicly chided the Government for not doing more to control immigration (see attached New Zealand Herald article). The Bank sees immigration as one of the drivers for rapid house price inflation in New Zealand, particularly Auckland.
Opposition political parties are hammering the Government on the housing crisis. The Government has said it will not introduce a capital gains tax on housing, which is seen as one of the main reasons that investors are favouring residential real estate over other classes of investment.
This leaves the Government (and the Reserve Bank) with few other mechanisms to dampen housing demand.
One of the few remaining options is the restrict the level of immigration. Politically the Government will not want to be seen to be responding to opposition pressure in a knee-jerk reaction. However it will be hard for them to not respond to the Reserve Bank’s comments and be accused of doing nothing about the housing crisis, so it is a fair bet that immigration criteria will be tightened, later on this year.
Look for this to happen later on this year when Immigration New Zealand completes its annual review of the Immediate and Long-term Skill Shortage Lists.
Possible options for the Government to reduce demand for immigration include:
- Altering the Skilled Migrants points table to make it more difficult to qualify for residency;
- Reducing the number of occupations on the Immediate and Long-term Skills Shortage List; and
- Removing lower-skilled occupations from the List of Skilled Occupations, thereby making those jobs ineligible for a Skilled Migrant residency application.
Often in the past when immigration instructions have changed they have not been made retroactive. That is to say, people who had migrated to New Zealand under old rules remain entitled to have any future application considered under those rules rather than the new ones. This practice is sometimes referred to as ‘Grandfathering’.
If there is reason to believe that less favourable rules may be introduced in the near future, it makes sense for an applicant to apply now under the existing rules to ensure that they benefit from any Grandfathering that is available when the rules change.
However there is no guarantee that Grandfathering will apply to any future change, so the only safe-haven is to apply for and obtain residency.
- If you are already in New Zealand on a work visa, consider applying now for residency under the current rules;
- If you are overseas and considering coming to New Zealand as a student or worker, apply now to ensure future applications you may make benefit from any Grandfathering benefits that may be available.