New Zealand's net migration surged in September as fewer New Zealanders moved to Australia.
Statistics New Zealand figures released yesterday showed a net inflow of 2740 migrants in September, the strongest monthly inflow recorded since July 2003.
ASB chief economist Nick Tuffley said migration had strengthened considerably over the past year due to fewer New Zealanders moving to Australia.
''The trend continued with departures to Australia falling by about 9% month-on-month, matching the decline in total departures. Departures to Australia were 40% lower than in September 2012,'' he said.
Labour and the Greens, which had long been critical of the number of people moving to Australia, again remained silent on the figures which show more people returning from Australia as the job market sours, and fewer people leaving for Australia.
Mr Tuffley said there were many reasons New Zealanders decided to emigrate to Australia, including the weather and higher wages.
But the primary driver was the relative states of the labour markets in the two countries.
When job opportunities in Australia were plentiful relative to New Zealand, many New Zealanders would leave as they did not require a visa to work in Australia and the wages on offer were usually attractive.
When the Australian job market was struggling, New Zealanders would again be responsive as they were usually ineligible for unemployment benefits in Australia.
''Many New Zealanders who find themselves out of work in Australia may return home and fewer New Zealanders will take the risk of moving to Australia in the first place,'' he said.
Westpac senior economist Felix Delbruck said the net inflow of people entering the country was stronger than he expected, with the surprise largely due to a further fall in departures of New Zealanders to Australia.
At just 2330, it was the lowest number since January 2010.
Arrivals of non-New Zealand immigrants continued at an above-average pace.
''If recent trends continue, annual net immigration will easily surpass 20,000 by the end of this year.
"With unemployment in Australia expected to hit around 6.5% next year, we expect net immigration to rise even further in 2014, making this New Zealand's biggest immigration cycle since the early 2000s.''
The numbers released yesterday were big enough to matter for the housing market over the short to medium-term, Mr Delbruck said.
They were one reason he was expecting house prices to keep rising in the year ahead - albeit at a slower pace - despite the lending restrictions and recent rises in fixed-term mortgage rates.
Statistical modelling suggested a net inflow of an extra 10,000 people was associated with an extra 3% worth of housing price inflation. That suggested net migration had turned from a significant drag on the housing market to a positive factor which would only get stronger next year, he said.
Overall, New Zealand had a net gain of 15,200 migrants over the 12 months to September, compared with a net loss of 3300 in the previous year.
The highest number of migrants by country came from the United Kingdom (6000), ahead of China (5400), and India (5100).
BNZ senior economist Craig Ebert said the Reserve Bank had increasingly mentioned immigration in its commentary and documents this year, in the context of not just the problematic housing market but things such as potential growth and the way it influenced thoughts on so-called neutral interest rates.
''So, today's results will only intensify this debate.
For us, the sudden strength in net immigration - recall it was next to nothing earlier this year - is simply another fundamental reason for the Reserve Bank to begin normalising its policy rate, lest we repeat the extent of the 2003-07 cycle,'' he said.
Most economists are picking March for the first rise in the official cash rate from the current 2.5%.
