The number of New Zealanders moving to Australia to search for a better life and job opportunities slowed substantially last month to reach the lowest level since December 2010.
Statistics New Zealand figures released yesterday showed departures of New Zealanders to Australia fell to 3180 last month.
Westpac economist Felix Delbruck said an improving trend in transtasman migration was clearly under way in line with his view that labour market prospects in Australia were becoming steadily less attractive compared with New Zealand's.
About 45,700 New Zealanders left the country for Australia in the year ended April 30.
Departures to Australia in April 2013 were nearly 23% below the April 2012 figures. At the same time, the flow of arrivals from across the Tasman was increasing.
Monthly net immigration had increased further to a net inflow of 1570 people, Mr Delbruck said.
''The trend has clearly turned positive. This is the seventh net inflow in the last eight months. Departures to Australia have come down significantly but arrivals of foreign migrants also appear to have picked up.''
Annual net migration remained below the historical average of about 12,000 people, but on current trends that total would be passed by the end of the year, Mr Delbruck said.
Westpac expected net immigration to increase further in the next couple of years as employment conditions in Australia continued to soften and labour shortages associated with the Canterbury rebuilding worsened.
ASB economist Daniel Smith said net migration inflows would place further strains on supply-constrained housing markets in some areas of the country.
For now, the impact would be marginal as the inflows remained ''fairly small''. By comparison, inflows of 3000 to 4000 a month were seen regularly in the early to mid-2000s.
''With the Reserve Bank keeping a keen eye on the housing market and cost pressures related to the Canterbury rebuild, we expect the OCR to first rise in March 2014,'' Mr Smith said.
In a New Zealand at a Glance paper released yesterday, BNZ research economist Stephen Toplis said the New Zealand economic expansion was gaining in momentum.
The rebuilding of Christchurch was supporting increasingly widespread confidence, and very low interest rates and a booming housing market were playing their part.
Eventually that would necessitate a response from the central bank but while annual inflation remained below 1%, and was set to stay there for a while, it suggested that any such response might be some time in coming, he said.
The New Zealand dollar remained supported by money-printing elsewhere and the relative strength of the domestic economy.
Investment activity would be the driver of a ''solid period'' of expansion over the next two years.
Construction, especially residential, would provide most of the momentum.
That, accompanied by rising house prices, was likely to support growth in expenditure on durable goods, Mr Toplis said.
Unfortunately, net exports - thanks to strong import growth - would provide a negative contribution.
A surprising strong fourth-quarter gross domestic product (economic activity) result saw the BNZ revise upward its growth forecast for this year to 2.9%.
''We are forecasting 3.6% growth for the following year. There is a topside risk to these forecasts if the rebuild of Christchurch proves more aggressive than we have anticipated.''
New Zealand's labour market was gradually tightening, Mr Toplis said.
Employment growth was modest but sufficiently strong to result in a gradual fall in the unemployment rate.
