New Zealand’s Housing Bet Is Driving Workers to Australia

In 2025, more than 41,000 New Zealand citizens left for Australia, a sharp rebound from the pandemic years. In the first three months of 2026, departures reached a 13-year high. New Zealanders have long gone abroad for work and experience, but the people leaving now include established workers in their 30s and older, along with their families.

Paul Spoonley calls that change disturbing: these are people who have already been working in New Zealand, not just young graduates taking a temporary overseas trip. Ainsley Thomson says her children’s school roll has fallen considerably as parents move to Australia. Bernard Hickey describes the movement through his own family: three brothers settled in Melbourne with their families, and his parents eventually migrated too.

The departures may be acquiring their own momentum. Spoonley says the Australia–New Zealand community is large enough to attract people who might not previously have considered leaving. More than a million of New Zealand’s roughly 5.3 million people live abroad, and Spoonley says the diaspora is among the largest in the OECD and highly skilled on average.

New Zealanders can live and work in Australia without a visa, and qualifications are well understood across the two countries. Thomson points to their cultural similarity; Spoonley says Australian employers have been recruiting aggressively in New Zealand. Hickey puts the wage difference plainly: on average, people doing the same job earn 30 to 40 percent more in Australia.

The gap reflects the scale and composition of the two economies. Australia has a much larger economy, a major financial-services sector, and greater commodity wealth. New Zealand’s domestic economy is concentrated in services such as health, education, hospitality and tourism, while much of its foreign income comes from a narrower export base, including farm products, beef, dairy and timber.

The source links New Zealand’s economic pressures to a pattern in which growth did not necessarily translate into substantially more output for each hour worked. Bennett notes that recent recession and rising unemployment are showing up at the departure gate; alongside the wage difference, those conditions make Australia’s labor market more compelling.

During the 2010s, strong export demand, tourism and cheap credit helped make New Zealand’s economic model look successful. Immigration added to growth by supplying workers and supporting demand, including demand for housing. But, as Bennett frames it, a larger economy did not necessarily mean substantially more output for each hour worked.

The housing preference has deep roots. Thomson describes the “quarter-acre dream”: a standalone suburban home with room for a garden and backyard cricket. After the 1987 stock-market crash, Hickey says, a generation of New Zealanders swore off investing in shares and put money instead into residential property. Housing became not only a home but a retirement plan.

Hickey estimates that households have about 60 to 70 percent of their savings tied up in the value of their homes. He puts the housing market at roughly NZ$1.6 trillion, about four times GDP, while the stock market is worth around NZ$200 billion. The concentration matters because money invested in houses and land is not being invested in businesses or other parts of the economy.

Bernard Hickey describes the result as a system in which households and voters have, almost accidentally, bet their savings on housing. That makes a housing correction more than a loss on paper: when so much household wealth rests on one asset, falling prices can weaken the broader economy.

House prices rose strongly for more than a decade in Auckland and Wellington, then surged during the pandemic. When prices began falling at the end of 2022, the declines were substantial. Thomson says values fell almost 30 percent in Wellington, 25 percent in Auckland and about 19 percent across the country.

The downturn arrived as inflation outpaced wage growth. Bennett points to pay growth being overtaken by inflation from 2021 onward. Thomson says people feel much poorer and are holding back on renovations, new cars and other spending. The housing market’s weakness and the cost-of-living squeeze reinforced each other: households felt poorer just as housing had become the main store of their wealth.

Immigration had helped supply both labor and housing demand. After borders reopened, Spoonley says, about 250,000 migrants arrived in 2023, producing a net gain of more than 130,000. Some sectors depend heavily on overseas workers: he estimates that about 40 percent of general practitioners come from abroad.

But total population growth does not resolve the skills imbalance. Spoonley says skilled New Zealanders are leaving while the country faces major gaps in health care, IT and construction. With the population aging rapidly, he expects labor shortages to become more acute.

The pressures are not uniform. Bernard Hickey describes Auckland and Wellington as being in housing recessions, with high and rising unemployment and struggling service sectors. Christchurch is doing well; farmers are receiving record export receipts, and some high-tech businesses—in areas including space rocketry, gaming and agricultural technology—are performing strongly.

Meanwhile, New Zealand is trying to attract wealthy foreign investors. A revised golden-visa program, relaunched in 2025, offers a route to permanent residence. Thomson says a person investing $5 million over three years needs to spend only about 21 days in the country during that period. The arrangement may bring investment and expertise, she says, but it also lets applicants treat New Zealand as a place to fly in and out of, or as a fallback if conditions worsen elsewhere. Bennett reports strong interest, with nearly a third of applicants coming from the United States.

That offer sits uneasily beside the loss of workers who already live and work in New Zealand. Thomson argues that the country needs to offer higher wages, while noting that improving productivity is a long road. Hickey says the deeper change is to stop treating housing as the main national asset. He sees a political incentive to preserve the status quo, but an economic need to change it—especially for people in their 20s and 30s who have been locked out of home ownership and see Australia as their only route to progress.

Spoonley is less concerned about people leaving for a few years and returning to raise families than about losing their connection to New Zealand altogether. Even if they do not come back permanently, he argues, they could remain connected through investment and other contributions.

New Zealand’s economic test is not simply how to attract more people. It is whether the country can offer its own workers a reason to stay—or a reason to return.