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Tuesday, March 15, 2011

Economists predict 4% population drop for Christchurch

Economists predict 4% population drop for Christchurch

Christchurch may lose 4 percent of its population over the coming year, according to ANZ Bank economists.

"Following the February 22 earthquake, it is inevitable that some residents will decide to leave permanently," they said today in a market focus report.

"We estimate that Christchurch could possibly lose up to 4 percent of its population permanently in the first year, via emigration to elsewhere in the country or overseas, and a reduction in immigration, if overseas patterns are followed".

The economists also warned that migration into Christchurch from other parts of Canterbury over recent decades could also easily reverse "and we could see larger outflows".

The response of the Government and business sector, and attitudes towards people living in Christchurch, would be critical.

The economists said there were reports that as many as 65,000 Christchurch residents -- or 17 percent of the city population -- had left the city following the February 22 earthquake, which is thought to have killed about 180 people.

"The big question is how many will decide not to return at all and what it will do to future migration trends?" the economists said. "And for those that decide not to return, where will they choose to settle?"

The extended aftershocks in Christchurch were boosting the psychological impact on residents in the city, which had a population of 380,000 before the initial September quake.

Over the past decade, the city had gained about 1100 people a year through domestic migration, and about 1600 through international migration.

If the permanent loss of people to NZ or overseas was similar to the 2.5 percent seen in Japan's 1995 Kobe earthquake, then 9500 people would quit the city.

But it was less clear what effect there would be on inflows of people from within New Zealand and overseas, which previously accounted for 3.5 percent of the population in any given year .

Of the previous 7500 permanent arrivals from overseas each year, "it is possible that we could see a halving of that in the near-term," the economists said. "In fact this seems somewhat optimistic".

There were also likely to be fewer people going to Christchurch from its main domestic sources of "immigrants", Dunedin and Wellington.

Among the people quitting Christchurch, most would normally head to Wellington with central Auckland attracting the second highest share, and Dunedin coming in third.

"However, relocating from one quake prone area to another does not pass the smell test, so we suspect you can rule out Wellington as a beneficiary," the economists said. "It would seem that Auckland and Dunedin will see the most migration out from Christchurch -- at least for those people who still seek to stay in New Zealand". Auckland could see increased pressure on its housing shortage.

Areas around Christchurch periphery -- Timaru, Ashburton, Blenheim, Greymouth and part of the wider Canterbury area -- were also likely to reverse their previous population drift to Christchurch.

"All up, we think it is possible that Christchurch City could see a loss of around 15,000 residents in the first year, equivalent to almost 4 percent of the population," the economists said. This included 9500 residents deciding to leave permanently, 4000 fewer migrants from overseas than otherwise would be the case in the absence of the earthquake, and 1500 fewer internal migrants.

These estimates assumed Christchurch's port, universities and airport remained dominant players in the South Island economy: if any of them failed the "depopulation fallout" was likely to be significantly greater.

Slower growth in the city meant that Christchurch's population would be around 25,000 lower than expected by 2031, with implications for the amount of infrastructure, services and amenities that would be required.

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