For the first time in quite a while, the Australian economy is starting to wobble a little. Now before anyone gets too excited, it is nothing compared to what New Zealand has endured over the past four years, but the cracks are beginning to show in the lucky country.
For years we have looked across the ditch wondering how Australia always seems to come out on top. Bigger wages, stronger growth, more opportunity. It has become part of the Kiwi psyche to assume Australia is where things simply work better. But strangely enough, when New Zealanders head to Australia during tougher times, it often helps New Zealand more than we realise.
That might sound counterintuitive but hear me out.
Saving Money
New Zealand’s net migration loss to Australia last year sat at around 36,000 people. To put that into perspective, it is basically the entire city of Whanganui packing up and leaving.
The biggest driver has been simple. Better wages and more jobs.
Over the last four years, New Zealand’s economy has slowed significantly. Manufacturing closures, weaker business confidence and a softer labour market have all contributed. For many people, Australia has offered something New Zealand currently cannot, opportunity.
But there is another side to this story.
If we assume even 10 percent of those who left may otherwise have struggled to find work here, that potentially removes around $108 million a year in government support costs. With unemployment benefits averaging roughly $30,000 per person annually once wider support costs are considered, migration has quietly relieved some of the pressure sitting on the New Zealand economy.
It is not necessarily a perfect outcome, but during difficult economic periods, it does matter.
Unemployment
New Zealand’s unemployment rate rose sharply from record lows near 3 percent to a peak of 5.3 percent last year. Over the past 12 months it has remained relatively stable, and one reason for that stability has been the number of people leaving for Australia.
Now, higher unemployment is never ideal, but there is nuance to it.
When the labour market loosens slightly, employers gain access to a broader pool of candidates and staff turnover slows. Employees become more cautious about changing jobs and businesses regain some control after years of labour shortages and wage pressure.
International markets also tend to favour this stability. A steady unemployment rate signals that an economy is finding balance again, rather than spiralling further into distress. That matters for things like government borrowing costs, bond markets and international confidence.
It is all part of the cycle, even if it does not always feel great while you are living through it.
Home is Home
The past few years have been hard on New Zealand. There is no point pretending otherwise.
But one of the advantages of being a small country with close ties to Australia is that people have somewhere to go when things tighten up. Historically, many of those same people come back once conditions improve.
We saw exactly that during the stronger economic years between 2015 and 2019, when the net migration loss to Australia dropped to only around 3,000 people annually.
Kiwis are adventurous, but home still matters.
A lot of those leaving today are not necessarily leaving forever. They are chasing opportunity, experience and financial breathing room. When New Zealand finds its feet again, many will return with new skills, savings and perspective.
That has happened before and it will happen again.
Gidday Mate
Australia also remains incredibly important to New Zealand in another way, tourism.
Nearly one in every two international visitors to New Zealand comes from Australia, equating to roughly 1.4 million Australians visiting each year. With average visitor spending sitting around $2,000 per trip, that injects close to $2.8 billion annually into the New Zealand economy.
And thanks to the weak New Zealand dollar, we are looking pretty attractive right now. For Australians arriving here, everything feels about 20 percent cheaper the moment they step off the plane.
A cheaper currency is painful when you are travelling overseas, but brilliant when you are trying to attract tourists.
The Wellington Market
The Wellington property market has shown a few encouraging signs over the past month.
We are seeing days on market starting to ease slightly, and more properties are attracting multiple offers again. Buyer confidence still feels cautious, but there are definitely more conversations happening and more activity at open homes.
The challenge remains the higher long-term level of stock available. Buyers still have options, and that means decisions are taking longer than they once did.
As we move into winter, things will likely remain a little subdued, and this will not be helped by the election in November. That said, good homes that are well marketed and priced correctly are continuing to generate solid interest, which is often the first sign that momentum is slowly returning.
Wellington Market Quick Stats
What’s On in Welly?
Lōemis – 9-24th June
It’s a midwinter, multi-night, multi-venue, and multi-sensory arts festival.
Now in its eleventh year, Lōemis has developed into a fantastical and transformative performance festival. It traverses the worlds of food, sculpture, immersive art, music, poetry, film, and more. Traditionally taking place over the winter solstice, it embraces discovery, curiosity and ritual.
Julia- 30 May – 27 June 2026 Circa Theatre
In 2012, Julia Gillard delivered a landmark “misogyny speech” to the Australian parliament. It ricocheted across the world. This one-woman show puts us inside a very public storm and reveals the life and career that led to it.
Mills Albert Wellington Saints v Nelson Giants
The Hurricanes are set to face the Crusaders in Round 12 of Super Rugby Pacific.
If you, or anyone you know, could benefit from a considered market assessment by Wellington’s only licensed agent and registered property valuer, please do not hesitate to call. We are always happy to help.
