New Zealand recorded the highest annual immigration in more than five years as fewer Kiwis headed overseas, providing added stimulus to the housing market and underpinning consumer demand.

The number of permanent arrivals exceeded departures by 22,588 in the 12 months ended January 31, according to Statistics New Zealand. That’s the highest since May 2004.

Stronger migration will be evaluated by Reserve Bank Governor Alan Bollard, who releases his quarterly review of monetary policy tomorrow.

The property market has shown a more tepid recovery than expected by Bollard, who has stood by his intention not to raise interest rates until about the middle of the year – later than some economists expect.

“Net migration remains a key source of support for the economic cycle,” said Philip Borkin, economist at Goldman Sachs JBWere.

“The key to watch over the coming 12 months is whether we see a reversal in departures to Australia given the Australian economy’s outperformance.”

According to today’s data, there were 33,414 permanent and long-term departures for Australia in the 12 months through January, down from 50,531 a year earlier

The global financial crisis has capped the exodus of Kiwis going overseas, as jobs dry up and home seems like a more attractive alternative.

The number of short-term visitors to New Zealand rose 5 per cent last months from January 2009. There were 2.47 million visitor arrivals for the year to January 31, up 1 per cent on the previous year.

(Source - The Dominion Post)