Is New Zealand Really Losing Kiwis? Migration Myths, Macro Shifts, and the Investment Signals Beneath the Surface
This August, headlines are filled with a familiar anxiety, New Zealanders are once again leaving for Australia in record numbers. The narrative is one of loss: a shrinking tax base, brain drain, and an uncertain future. But beneath the surface, the real story is more layered. Migration flows are complex, macro cycles are pivoting, and capital, both global and domestic is recalibrating in ways that most headlines miss.
As the Reserve Bank of New Zealand holds its line while inflation softens, and as China’s slowdown accelerates while the US preps for election-year volatility, investors are starting to reposition. Real estate volumes are beginning to rise, investor lending is ticking up, and the New Zealand dollar remains at historic lows. These aren’t just noise, they’re signals. And those paying attention are quietly stepping back into the market.
At Fairhaven, we don’t chase narratives. We track the underlying flows that shape market behaviour. This month, we unpack the real story behind New Zealand’s migration data, the global macro crosswinds that matter, and the case for early accumulation across key yield-driven asset classes.
This month’s edition covers:
What the migration data really says about demand patterns and labour flows
Why student arrivals and aged care demographics are quietly reshaping real estate demand
How global capital is rotating amid China’s policy fatigue and the US political cycle
Our view on where institutional investors should position now, and what to avoid
August’s updated market signals, including REINZ sales data and RBNZ projections
Featured investment listings with potential upside across social housing, PBSA, and high yielding residential markets
1. Migration Trends and Domestic Offsets: What’s Really Happening in New Zealand
The headlines this month continue to focus on the record number of Kiwis relocating to Australia, with net migration to Australia exceeding 45,000 in the last 12 months. While this has sparked concerns over labour drain, tax base erosion, and economic stagnation, the broader picture tells a more nuanced story.
New Zealand’s inward migration remains historically high. Over the past 12 months, New Zealand has welcomed more than 133,000 net migrants, with strong intake from India, the Philippines, China, and South Africa. This inflow is not just about filling labour gaps, it is actively reshaping demand patterns across housing, infrastructure, and education.
Student Visa Recovery Strengthens the Education Sector
Student visa approvals have returned to near pre-COVID levels. As of July 2025, over 57,000 new student visas have been issued in the past year, led by strong demand from China, India, and Southeast Asia. Universities in Auckland, Wellington, and Canterbury are reporting higher-than-expected second-semester enrolments, particularly in postgraduate and professional certificate programs.
This has clear implications for housing demand. Purpose-built student accommodation (PBSA) assets, especially those near major campuses, continue to benefit from full occupancy rates, upward rent revisions, and limited new supply.
Aged Care: Stable Demand from an Aging Population
While migration patterns fluctuate, New Zealand’s demographic aging trend remains a stable demand driver. The number of residents over the age of 65 is expected to grow from 850,000 to 1.2 million by 2035, supporting continued long-term demand for community-integrated care facilities, retirement villages, and aged care services.
For investors, this translates into two things: stable yields in the right subsectors, and demographic tailwinds that provide resilience regardless of macro noise around migration.
2. Global Undercurrents: The US Pivot and China's Domestic Tightrope
United States: Yield Compression, Political Volatility, and Capital Rotation
The US economy has stayed surprisingly resilient into Q3, with GDP growth running at 2.4 percent and unemployment near record lows. But behind the headline figures, forward indicators are beginning to soften. Inflation is down to 2.3 percent, and the Fed has now paused its hiking cycle with futures markets pricing in a cut as early as Q1 2026. Long-dated bond yields have edged lower in anticipation.
This has triggered a rethinking of portfolio positioning. Yield compression in US credit and real estate markets is forcing investors to look offshore for value. More family offices and institutional allocators are revisiting overlooked markets where spreads remain wide and macro policy is more predictable.
At the same time, the upcoming US election is injecting a fresh layer of uncertainty. Policy positions on corporate tax, trade with China, and capital gains are likely to diverge significantly depending on the outcome. This uncertainty often prompts early repositioning, particularly into hard assets with stable income streams, currency hedging potential, and lower political beta.
China: Stimulus Fatigue, Structural Drag, and Policy Signaling
In China, the mood remains cautious. The property sector continues to act as a deflationary anchor on consumer and business sentiment, while youth unemployment has hovered near 15 percent despite ongoing stimulus. Private sector confidence is still subdued, and capital controls remain tight, with many high-net-worth individuals exploring options to move wealth offshore.
Beijing has recently stepped up pressure on local governments to spur housing transactions and stimulate infrastructure spending. But many analysts see this as a short-term bandage rather than a long-term fix. Markets are looking for structural reforms, not just liquidity injections.
This presents two key takeaways for global investors:
First, outbound Chinese capital is becoming more selective. Buyers are focusing on quality, yield stability, and legal certainty.
Second, Southeast Asia and Commonwealth jurisdictions are emerging as preferred destinations. In that context, New Zealand’s regulatory transparency, property rights, and FX efficiency are strong comparative advantages.
3. Implications for Capital and Portfolio Positioning: What Investors Should Watch
The macro environment across New Zealand, the US, and China is evolving rapidly. For investors with exposure to real assets, particularly in yield-oriented or defensive portfolios, this changing backdrop presents both cautionary signals and attractive openings.
Repricing Risk and the Yield Rotation
In the US, markets are beginning to reprice risk as the Fed pauses hikes and inflation decelerates. While this has softened the bond market’s volatility, it also means that the abnormally high yields across fixed income will not last forever. The opportunity window for locking in double-digit cap rates on US multifamily and REITs is narrowing. As these normalise, global capital will seek new income pathways, particularly in markets with lower correlation to US rate volatility.
New Zealand, by comparison, is already entering the yield normalisation phase. With the OCR expected to ease from 3.25 to 3.00 percent by year-end, borrowing costs are beginning to improve for local and foreign investors. Coupled with the NZD’s relative weakness against USD and SGD, this creates an FX-levered opportunity for real asset accumulation.
Sector Divergence: Where We See Stability and Growth
Student Accommodation: As detailed earlier, university enrolments and student visa approvals are rising, with occupancy rates for purpose-built student housing (PBSA) near all-time highs. We expect stable growth in rent and minimal vacancy risk in major university precincts, particularly in Auckland and Wellington.
Aged Care and Healthcare Real Estate: Demographic inevitability is supporting sustained performance in community healthcare assets. Investors should watch for consolidation plays or value-add opportunities in operational aged care with integrated services, as yield compression may occur once OCR easing is fully priced in.
Residential and Build-to-Rent (BTR): While headline house price growth remains flat, migration and demographic drivers suggest renewed interest in BTR models, especially in Auckland and Tauranga. This is further amplified by persistent supply constraints and shifting renter demographics.
Commercial and Office: Secondary-grade office stock is likely to underperform. In contrast, well-located assets with strong tenant covenants, particularly in education, healthcare, or tech-adjacent sectors, are beginning to attract institutional interest, though valuations remain sensitive to occupancy risk.
What to Avoid (or Price Carefully)
Over-leveraged fringe retail or regional logistics assets without anchor tenants
Office assets in markets with structural oversupply and underperformance in WFH-heavy segments
Heavily strata-titled legacy buildings without value-add pathways
The Fairhaven View
We are entering a recalibration phase across global capital markets. In that context, investors must weigh stability against return. New Zealand offers real assets with low political volatility, transparent legal structures, and asset-backed income. While headlines may focus on migration and offshore shifts, the underlying momentum is favouring sectors with demographic certainty and limited supply.
The next six months will be critical. As US rate paths clarify and China’s policy response takes shape, capital will begin to flow more decisively. Our view is that portfolios positioned early into high-conviction sectors, student housing, aged care, and BTR, will be best placed to benefit.
The macro environment is pivoting in ways that are both subtle and significant. In New Zealand, headlines may focus on net migration outflows, but the deeper trend is one of structural resilience. Our inflows remain strong, student arrivals are accelerating, and demographic demand in aged care is building steadily. Beneath the noise, the signals point to opportunity.
In the US, a maturing rate cycle is slowly reshaping global capital flows. What looked like peak yield is already flattening. Meanwhile, China’s continued uncertainty is fuelling selective capital movement into safer jurisdictions. In that context, New Zealand’s stability and yield profile are beginning to stand out more clearly on the radar of regional allocators.
For investors, the message is simple. The next few quarters will test conviction. Those who move ahead of consensus and focus on structurally supported sectors like student housing, aged care, and build-to-rent will likely outperform. Liquidity is returning, risk is repricing, and value is rotating.
At Fairhaven, we believe this is a cycle that rewards clarity and boldness. Not all capital needs to move quickly, but it must move wisely. We remain focused on building exposure to the real assets that matter most in this environment, those backed by income, grounded in regulation, and aligned with long-term demographic demand.
4. Beyond the Headlines: Market Sentiment, Structural Shifts, and the Case for Accumulation
While headlines continue to focus on migration figures and OCR speculation, the underlying market dynamics are telling a different story. For disciplined, well-capitalised investors, the current environment is less about caution and more about selective accumulation.
RBNZ Signalling vs Realityting.
The RBNZ’s official line is one of patience. The OCR has held at 3.25 percent through July, with Governor Orr emphasising a data-driven approach. But the fundamentals are quietly shifting. Inflation has cooled to 2.5 percent, GDP growth is stable but soft, and mortgage lending growth is subdued. The combination suggests that the central bank is setting the stage for a dovish pivot before year-end.
Central banks rarely signal moves too early, preferring to avoid market overreaction. However, investors who read the underlying indicators can position ahead of the easing cycle. Rate-sensitive sectors like real estate stand to benefit, with potential for cap rate compression into 2026 as borrowing costs decline.
China’s Slowdown and the Regional Opportunity
China’s economic headwinds are intensifying. Property markets remain under pressure, with forecasts of up to a 10 percent decline in values through 2026. Consumer sentiment is weak, youth unemployment remains elevated, and local government debt levels are rising.
This has two clear effects. First, high-net-worth Chinese investors are looking to shift wealth offshore, with New Zealand emerging as one of the preferred safe-haven destinations alongside Singapore and Australia. Second, Chinese institutional capital is pulling back from higher-risk APAC markets, creating less competition for prime assets in stable jurisdictions.
For New Zealand, this means a dual benefit: rising offshore demand from capital-seeking stability, and a clearer acquisition runway for domestic and regional investors.
Low Transaction Volumes = Less Competition
Commercial property transaction volumes remain below long-term averages. According to CoreLogic and interest.co.nz, the share of new mortgage lending to investors sits around 22 percent, far lower than pre-COVID levels. Rather than signalling weakness, this points to a market still in the early phase of its recovery cycle.
Fewer active buyers mean greater negotiating power for those ready to deploy capital. High-quality assets in aged care, logistics, and institutional-grade student accommodation are seeing less bidding pressure, allowing for better entry pricing and more flexible deal structures.
The Fairhaven View
The next six months will define the first stage of the recovery cycle. The combination of softening rates, limited competition, and offshore capital interest creates a rare environment for accumulation. Those moving early into sectors with demographic resilience and supply constraints will be positioned to capture both income stability and capital growth as the cycle matures.
5. New Zealand Market Update: August 2025
Macro Outlook: Policy Stability Meets Early Recovery Signals
The Reserve Bank of New Zealand (RBNZ) has once again held the Official Cash Rate (OCR) at 3.25% in its August meeting, maintaining a tone of caution despite growing market expectations for a cut before year-end. Inflation remains anchored at 2.5%, right in the middle of the RBNZ’s 1–3% target range, while GDP growth for Q2 came in at 2.1% year-on-year, slightly above forecasts.
Beneath the surface, early indicators suggest momentum is building in certain segments of the economy. Mortgage approvals have risen for three consecutive months, and business confidence readings are at their highest level since early 2023. While the RBNZ is holding its line publicly, forward interest rate markets are now pricing in a 25bps cut as early as November, signalling growing conviction that the easing cycle will begin before year-end.
Currency Advantage for Offshore Capital
The NZD has continued to trade in a narrow band between 0.59 and 0.60 USD, holding close to its weakest levels since 2022. This stability at a relatively low base is creating an attractive window for foreign investors, particularly those holding USD or SGD, to enter the market with built-in FX upside.
Recent historical analysis shows that similar NZD trough periods have preceded currency appreciation phases of 6–12% within two years, particularly during monetary easing cycles. For cross-border investors in yield-driven sectors, this currency positioning remains one of the most compelling entry points in the past five years.
Real Estate Market Signals: A Quiet Shift Beneath the Headlines
The REINZ’s latest July 2025 report confirms that despite winter seasonality, the real estate market is firming across multiple fronts:
National sales volumes rose 4.0% year-on-year, reaching 6,319 properties—up from 6,074 in July 2024.
Auckland’s median price increased by 2.6% year-on-year to $975,000, its first annual growth since early 2022.
Nationwide median price rose 1.8% to $767,250, while excluding Auckland, the figure climbed 3.9% to $695,000.
Investor lending share rose to 24.1%, its highest level since February 2022.
Inventory levels tightened slightly, falling 0.4% year-on-year to 30,430 properties available for sale.
Median days to sell declined to 48 days, showing buyers remain deliberate—but not disengaged.
Distressed listings, per CoreLogic, dropped 18% year-on-year, confirming a soft landing in credit risk.
From a regional standpoint, resilience is widespread. Nelson saw sales jump 43.6% and its median price soared 15.7% to $760,000, while Otago and Waikato posted double-digit sales or price growth. Even smaller regions like Gisborne and Northland recorded listing increases, pointing to renewed seller confidence ahead of the spring cycle.
The Fairhaven View
The combination of anchored inflation, improving confidence, and a supportive currency backdrop suggests New Zealand is approaching a cyclical inflection point. While rate cuts are not yet official policy, the forward indicators are increasingly pointing in that direction.
For investors, this means the current window is one of the few in recent years where asset yields remain elevated, currency conditions are favourable, and competition for high-quality stock is still limited. Historically, these alignment points are short-lived.
Our view remains clear:
Student housing is positioned for continued rent growth and near-zero vacancy risk.
Aged care and healthcare assets offer defensive income with structural demographic tailwinds.
Select industrial and logistics assets in growth corridors continue to benefit from supply chain restructuring and e-commerce expansion.
As we move toward the final quarter of 2025, the case for early positioning into yield-driven sectors is strengthening. Those who secure quality exposure now will be well-placed to benefit from both yield compression and FX gains in the next 12–24 months.
6. Featured Listings: Strategic Entry Points in a Shifting Cycle
From Sentiment to Strategy: Where Capital is Quietly Moving
As we’ve seen with the softening in policy tone and the shift in macro indicators, the market is starting to reprice risk more constructively. But the capital hasn’t fully moved yet. This creates a brief but powerful window where income-producing assets can be acquired with stronger yields, flexible deal structures, and upside through operational repositioning or regulatory tailwinds.
Below are three listings we believe represent institutional-grade potential in the current cycle:
1. Government-Backed Social Housing - Auckland
Estimated Price: NZD 20+ million
Asset Type: Social Housing | 18 fully leased residential units
Net Yield: ~7.2%
Estimated Net Income: ~NZD 1.3M–1.5M p.a.
Tenure: Freehold
Nearby Demand Drivers: Suburban transport + social infrastructure
Notes:
This asset offers stable, government-supported income via a registered Community Housing Provider with funding backed by the Ministry of Housing and Urban Development. Each unit features four private bedrooms with en-suites and kitchenettes, alongside shared communal spaces. The property is professionally managed, maintaining full occupancy and operational consistency. Its proximity to transit nodes and suburban amenities further enhances tenant appeal. This is a rare chance to secure an ESG-aligned, institutional-grade investment with high social impact relevance.
Investment Potential:
Net Yield: ~7.2%
Capital Growth Assumption: ~5.72% p.a.
Blended Total Return Estimate: ~20.84%
(Cash portion: 7.2% + 5.72%, Debt portion: 2.2% + 5.72%)
Leveraged IRR (5-Year Hold): ~18–20%
Equity Multiple: ~2.2x
Occupancy Profile: 100% leased to registered Community Housing Provider
Exit Strategy: Ideal for ESG roll-up or REIT acquisition
Key Advantage: Stable government-backed cash flow, high social impact alignment
2. Serviced Apartment Asset - Auckland Fringe
Asking Price: NZD 10.885 million
Asset Type: Serviced Apartments | 38 units + parking
Net Yield: ~7.0%
Net Income: ~NZD 761,000 p.a.
Lease Term: ~13 years remaining with CPI-linked escalations
Tenure: Freehold
Nearby Demand Drivers: Major university, corporate demand, urban growth zone
Notes:
This asset offers stable, passive income with embedded growth via CPI-indexed rental escalations. Located in one of Auckland’s fastest-growing corridors, the property benefits from an established operator and a long lease tail , a rare combination in today’s compressed yield environment. With ongoing expansion in tertiary education and nearby commercial development, this listing presents a solid core income play with potential exit value uplift should cap rates compress.
Investment Potential:
Net Operating Income (2025): ~NZD 761,000
Net Yield: ~7.0%
Capital Growth Assumption: ~5.72% p.a.
Blended Total Return Estimate: ~20.1%
(Cash: 7.0% + 5.72%, Debt: 2.0% + 5.72%)
Leveraged IRR (5-Year Hold): ~17–19%
Equity Multiple: ~2.0x
Occupancy Profile: 38 units under long-term CPI-linked lease
Exit Strategy: Potential uplift via short-stay repositioning or REIT exit
Key Advantage: CPI-linked rental escalations, prime growth location
3. Multi-Building Housing - South Auckland
Indicative Price: ~NZD 17.35 million
Asset Type: Social Housing | 5 fully leased blocks (75 studio units total)
Net Yield: ~7.75%
Net Income: ~NZD 1.345 million p.a.
Tenure: Freehold
Nearby Demand Drivers: Transit access, community infrastructure
Notes:
This purpose-built portfolio comprises five individual buildings, each containing 15 fully self-contained studio units, currently leased to a prominent charitable trust operating in the social housing sector. The operator is aligned with government agencies under long-term funding frameworks, providing essential services such as elderly care, youth mentoring, and transitional housing.
The investment offers stable, government-supported income with 12-year leases already in place, structured on a fully net basis (excluding minimal landlord costs). Vendor finance of up to 75% is available for approved buyers at favourable rates, offering low friction entry for investors seeking high-yield, low-volatility assets.
The units are fully tenanted, professionally managed, and located near public transport infrastructure, which supports long-term demand. The portfolio is being offered with flexible structuring options, investors may acquire one or more of the buildings, with each title held separately.
Investment Potential:
Net Yield: ~7.75%
Net Rental Income: ~NZD 1.345 million (total portfolio)
Capital Growth Assumption: ~5.72% p.a.
Blended Total Return Estimate: ~21.2%
(Cash: 7.75% + 5.72%, Debt: 2.75% + 5.72%)Leveraged IRR (5-Year Hold): ~20%
Equity Multiple: ~2.0x+
Vendor Finance: Up to 75% LVR
Exit Strategy: Roll-up potential into ESG-aligned fund or REIT
Key Advantage: Long lease term, high yield, vendor-financing flexibility
Want to discuss any of these opportunities further? Reach out to our team directly:
Contact Information :
Petrus Yen – Managing Director
Petrus@fairhavenproperty.co.nz
Daarshan Kunasegaran – Analyst
Daarshan.Kunasegaran@fairhavenproperty.co.nz
Disclaimer:
The property details, financial figures, and projections provided in this article are based on publicly available information and internal estimates as of August 2025. They are intended for informational purposes only and do not constitute financial advice or an offer to invest. Projections such as IRR and equity multiples are indicative only and subject to change based on market conditions, financing terms, and execution strategy. Interested parties should conduct independent due diligence and consult with a qualified advisor before making any investment decisions. Fairhaven Property Group accepts no liability for decisions made based on the information presented herein.
