Departures rose to 128,705 last year from 101,585 in 2023, Statistics New Zealand said Monday in Wellington. Annual arrivals declined, resulting in a sharp drop in net immigration.

Both the increase in departures and the decline in foreign arrivals reflect a weaker labor market and slowing wage growth in an economy that contracted 2.1% in the six months through September. While that takes pressure off the housing market, slower population growth may also impede an economic recovery as the government pushes a pro-growth agenda ahead of the 2026 election.

“Weaker net immigration has eroded a key leg of support for the housing market, domestic demand and labor market capacity,” said Mark Smith, senior economist at ASB Bank in Auckland. “Easing economic support from net immigration and still-low tourism inflows will weigh on economic growth and translate into greater spare capacity.”

Today’s report showed a record 72,002 New Zealand citizens left the country last year, as did 56,703 foreigners who were residing in the country.

Net departures of New Zealand citizens—which includes about 25,000 who returned home—were a record 47,000, surpassing the 43,300 who left in 2023. About 56% of those leaving went to Australia, the statistics agency said.

Net arrivals of foreigners dropped by more than 97,000 from 2023 but were still the second-highest on record at around 74,100, today’s report showed. As well as the lack of job opportunities, the government tightened entry criteria to better target skilled workers and to fill vacancies in critical industries. 

Annual net immigration, which slowed to 27,092, has been shrinking since hitting a peak of around 135,600 in October 2023. ASB’s Smith said there are signs the pace of decline is stabilizing, alleviating the risk of net outflows in 2025.

Still, “while we could be past the turning point, future weakness can’t be ruled out given the relative under performance of the economy and highly uncertain global scene,” he said.