The Reserve Bank of New Zealand published research on 16 June 2026 showing that increases in immigration noticeably drive up house prices and household borrowing, adding solid evidence to a long-running debate about whether migration makes housing less affordable.

The paper, 'Migration and the New Zealand economy', uses economic modelling to track how migration flows feed through to house prices and credit. The key finding is straightforward: when immigration inflows are large relative to the population, real house prices rise and households take on more debt. Earlier RBNZ work, dating back over a decade, pointed in the same direction. An analytical note from 2013 put numbers on it: a migration inflow equal to 1 percent of the population was linked to roughly a 10 percent rise in real house prices.

Given that average New Zealand property prices were $934,806 in March 2024, the maths matter. A 10 percent shift means roughly $93,500 — a sum that weighs heavily on first-home buyers and on lenders assessing mortgage risk across the whole system.

How the Reserve Bank's toolkit fits in

The credit finding connects directly to the Reserve Bank's own recent history. In 2013, it introduced Loan-to-Value Ratio restrictions — rules that require borrowers to put down a larger deposit — specifically to slow the loop where rising property values allow people to borrow more. RBNZ analysis from March 2014 showed that these restrictions had kept house price growth about 3.3 percentage points lower than it would otherwise have been, and household credit growth 0.9 percentage points lower.

The 2026 paper effectively asks: if immigration shocks are a persistent driver of both prices and credit, how should the Reserve Bank set these prudential tools going forward? Migration flows are volatile and policy-sensitive — they can shift sharply within a single year — so building them into long-term financial stability settings is not a straightforward task.

Treasury has been working on the same problem from another angle. Its May 2024 working paper, 'The wider wellbeing effects of immigration', looked at how immigration shapes housing and infrastructure needs. The RBNZ's June 2026 paper adds a financial stability lens to what Treasury approached from a public spending and social infrastructure angle.

The broader context here is that New Zealand is currently in a migration cycle that, although it has fallen from the 2023 peak, remains above historical norms. Immigration settings, housing supply, and financial stability tools are being adjusted at the same time. The RBNZ paper quantifies the connections between them more precisely than the Reserve Bank has done before.

For the Reserve Bank itself, this research feeds into its regular assessments of financial stability and systemic risk. The bank does not set immigration policy — that remains with Ministers and Parliament — but its analysis informs how it calibrates the tools it does control, such as deposit requirements and credit restrictions. For select committees in Parliament examining housing law and financial regulation, the paper offers an independent benchmark: a measure of how migration actually translates into credit and prices, which can sharpen the evidence base for policy decisions.

The discussion paper is available in full on the RBNZ website. It carries the standard note that the views expressed are those of the authors and do not necessarily reflect official Reserve Bank positions.