The pace of immigration continued to increase for the third month in a row in October, the highest monthly inflow since June 2003, Statistics New Zealand figures show.
Westpac senior economist Felix Delbruck said the annual rate of net immigration now sat at nearly 17,500 and, at the current monthly pace, was set to surpass 20,000 by the end of the year.
''Once again, reality exceeded our already strong expectations. This time, the surprise was due to an increase in foreign migrants to 6000 - the highest since February 2004.''
Preliminary calculations suggested most of the extra migrants moved to Auckland rather than Canterbury. Departures to Australia held steady at low levels.
Foreign migrant numbers could be volatile from month to month, he said.
The bigger picture was of net immigration now clearly on a cyclical upswing, partly because of more people moving to Auckland and Canterbury, but mainly because of fewer people moving to Australia as job prospects there had cooled.
''We expect net immigration to peak at over 30,000 next year, which would make this the biggest migration cycle since the early 2000s. The upturn in migration is a significant reason why we expect house prices to keep rising next year, albeit at a slower pace, despite lending restrictions and higher mortgage rates,'' Mr Delbruck said.
