New Zealand's young leaving in record numbers as cost of living bites

Wellington, New Zealand – When Jessica Chong started sending out invitations for a recent party to celebrate her and her partner’s birthdays in Auckland, New Zealand, she realised that few of their closest friends would be able to attend.

In the last few months, most of them had moved overseas.

Chong’s experience reflects a broader trend.

Despite its international image as a progressive haven, New Zealand is experiencing a record exodus of people amid steep rises in living costs, a scarcity of jobs and what Chong calls a generally “grim” atmosphere.

“It just feels a bit empty,” Chong, 28, who is herself planning to move to London, told Al Jazeera.

“It will actually be kind of funny: we’ll move there and be hanging out with people we already know, which is not the point but will be kind of nice.”

New Zealander Jessica Chong is planning to move to London for new opportunities [Courtesy of Jessica Chong]

According to provisional figures from Statistics New Zealand, 131,200 people left New Zealand in the year to June 2024, the highest number on record.

Of those, 80,200 were citizens, roughly double the number of annual departures before the COVID-19 pandemic. Nearly 40 percent of those leaving were aged between 18 and 30.

With outward migration at unprecedented levels, experts fear that many of those leaving may not come back.

“It’s off the charts. We haven’t seen this number of New Zealanders leaving before,” Brad Olsen, principal economist at Wellington-based consultancy firm Infometrics, told Al Jazeera.

New Zealand, one of the world’s most isolated and least populous countries, has a long tradition of its citizens temporarily moving abroad for what locals call “overseas experiences”, most often to the United Kingdom or Australia.

Apart from the 5.2 million New Zealanders resident in the country, an estimated one million citizens live overseas.

When the pandemic hit, more than 50,000 New Zealanders rushed back home, where strict lockdowns and border controls kept the country largely COVID-free for more than a year, winning it plaudits abroad.

In recent years, though, New Zealand has struggled economically.

In June, the economy returned to growth after twin recessions in the span of 18 months, posting a modest 0.2 percent quarterly expansion.

Unemployment grew to 4.6 percent in the June quarter, up from 3.6 percent during the same period in 2023.Wage growth, though ahead of inflation, slowed to 4.1 percent, down from 4.3 percent the previous year.

For many young New Zealanders, home ownership feels ever out of reach.

After several years of declines, house prices are once again rising and remain roughly seven times higher than the average income, according to Infometrics figures.

Overall inflation peaked in 2022 at 7.3 percent, one of the highest rates in the developed world, and remains well above the central bank’s target at 3.3 percent.

As a result, the Reserve Bank of New Zealand rolled out successive hikes in the benchmark interest rate, which peaked at 5.5 percent.

A view of Auckland in New Zealand’s North Island [Catherine Ivill/Getty Images]

“It’s the right medicine, but it makes the economic climate feel very difficult for people,” Olsen said.

Driven by discontent over the economy, voters in October replaced the progressive Labour-led government with a cost-cutting conservation coalition led by the National Party, headed by former airline executive Christopher Luxon.

After the Reserve Bank of New Zealand last month announced a 0.25 percent interest rate cut, Minister of Finance Nicola Willis expressed hope that the economy was “back on track” after years of spiralling prices.

“New Zealand has been suffering an acute cost-of-living crisis since the middle of 2021, with weekly food budgets stretched thin, mortgage repayments high and confidence in our living rooms, offices and boardrooms low,” Willis said.

For many, though, signs of a turnaround are coming too late.

More than anywhere elsewhere, those who feel disillusioned are turning to their closest neighbour.

In 2023 alone, 44,500 New Zealanders relocated to Australia, according to Statistics New Zealand.

The scale of the outflow is particularly concerning to economists like Olsen, who believes it signals that many New Zealanders are making a more permanent shift than the normal “overseas experience”.

“It does highlight that there are wider moves afoot. Part of that is a view that the grass is greener across the ditch,” Olsen said.

That is driving “the biggest exodus we’ve ever seen”, he added.

Michaela Young, 27, is among those who have made the move across the Tasman Sea.

After graduating from the Victoria University of Wellington with a master’s degree in biomedicine, Young struggled to find jobs in her industry that paid enough for her to get by.

“The cost of living was a huge deal, and it was definitely becoming more rampant,” Young told Al Jazeera. Groceries “were a bit crazy”, she added.

New Zealand Prime Minister Christopher Luxon’s National Party was elected in October, 2023 [AFP]

In an analysis earlier this year, World Vision found that the cost of basic food items in New Zealand had jumped by 56 percent between 2022 and 2023. Young said she was particularly struck by the price changes when she saw a bag of marshmallows on sale at a supermarket for 8 New Zealand dollars ($4.99).

In March, Young moved to Melbourne, following the lead of several friends and former housemates.

In Australia’s second largest city, she found herself surrounded by other New Zealanders.

Every Tuesday, she and her friends gather at a local pub for drinks and a quiz. They often find themselves hampered by their lack of an Australian teammate but are occasionally able to win pity from the quiz master, who is also a New Zealander.

While Chong and Young both say they eventually expect to return to New Zealand, Olsen fears that old assumptions about reverse migration may no longer hold true.

Many New Zealanders who move abroad have traditionally returned home after a few years to be close to family, he said.

“But if you haven’t got a job and you haven’t got an affordable house, then you really start to ask the question: Are you better to come back to New Zealand, or are mum and dad better to move wherever you are in the world?”

Bigger outflows combined with weaker pull factors are when “we really start to risk population and innovation into the future”, Olsen said.

Now, he said, people are leaving in such large numbers that he is seeing the effects in his own circles.“You seem to either have leaving parties or invitations to farewell brunches every week,” he said.