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Auckland’s international student boom

This post was meant to be a sequel to Auckland’s migration boom (part 1), but it’s worked out slightly differently, hence the different title. International education is a major factor in our immigration numbers, but there’s a bit more to it than that.

International students vs migration

Firstly, “migration” is a slightly vague concept. Is someone who wants to study or work here a migrant, if they’re only planning to stay here for 18 months? How about five years? What’s an OE, or a working holiday, and are your other intentions important besides just how long you’re planning to stay?

The standard definition New Zealand uses, like most other countries, is to call people “visitors” if they’re planning to stay less than a year, or “permanent and long-term arrivals” if they’ll be staying longer. Those are the main ‘migration’ statistics we use.

International students can be classified as either visitors or ‘migrants’, depending on their course and what they plan to do once they finish studying. As per the graph below, there have been big increases in both types of students since 2013.

International Student Arrivals

If you look at the “migrants” line, which is really just students who think they’ll be here for at least a year, there were 28,000 arrivals in 2015, vs a more stable 15,000 in 2008-2013. The number of short-term student “visitors” has also grown, but to a lesser extent.

The graph above is based on people arriving with a student visa. However, it doesn’t show when they depart again (or when they change to a work visa once they finish studying, for example). The main point here is that if our tertiary institutes reach capacity, students will stop contributing to ‘net’ migration. The departures each year will balance out the arrivals, and NZ’s migration boom could appear to taper off, even if student numbers remain at high levels.

In practise, many students do want to remain in New Zealand after they finish studying, so there will still be some ‘net’ migration – student numbers could level out, but those who stay on after study would still be ‘net’ migrants. But the net figure would still drop back from where it is now.

The overall sector

No more on migration – from here on, I’ll just look at the overall international student sector. I’ve used data from a few different sources, which don’t quite align perfectly, but I think they show the overall picture pretty well.

At the nationwide level, NZ’s international education sector grew strongly in the late 90s/ early 2000s, and has had various ups and downs since. Most recently, we’ve had two years of strong growth, coming close to the early 2000s peak (source: MBIE).

Student visas granted

Where in NZ are international students studying?

I’ll turn now to some slightly different data, which I’ve compiled from educationcounts.govt.nz.

Student enrolments

Auckland is getting a much higher share of international students than it ever used to – and it always had a large share anyway.

The educationcounts.govt.nz graph probably doesn’t quite capture the full increase in the last few years since it only goes to calendar 2014. MBIE’s graph, below, has more recent data, for 2014/15:

Student enrolments MBIE

Two points from all this:

  • Auckland currently has more international students than it’s ever had before
  • Student numbers in the rest of the country have been flat or falling depending on which graph you look at, but certainly all the growth has been in Auckland.

Source countries

Looking at the source countries of international students, India and China are by far the largest. In the late 90’s, we received very few students from either country. That changed rapidly: by the early 2000’s almost half of all the international students here were from China (MBIE). When those student numbers dropped away again, it was a big factor in Auckland’s CBD apartment boom drying up. Although Chinese student numbers have been recovering again in the last few years, they’re still well below the peak.

Student visas by country

By contrast, India wasn’t a major source of international students until quite recently, but it has rocketed up in the last couple of years. In 2012/13, 8,365 Indians were granted student visas, and in 2014/15, 19,305 were. That increase of more than 10,000 students from India is larger than the increase from every other country combined.

Institution types

The number of people granted student visas to attend schools has been pretty constant over the last decade, at 15,000-18,000 a year (MBIE).

Tertiary is where the real action is, with 62,000 people granted visas in 2014/15. The numbers at universities have been quite flat, and the growth in the last two years has almost all been through Private Training Establishments (and Polytechnics to a lesser extent).

Institution type

Private Training Establishments teach a range of different qualifications – management and commerce, hospitality, IT and English. These might not be glamorous, but they do provide vocational training and skills (except for English, which I guess is a good first step to other study). There have been concerns that (some) PTEs are lower quality than other education providers in NZ. All providers are monitored by NZQA, but hopefully the monitoring programme has been able to cope with the growth in the PTE sector over the last couple of years.

The good and the bad

New Zealand, and Auckland in particular, does well out of international students. Education is a major export: NZ earns money not just from the fees charged, but from the money students spend on other things. International students strengthen our overseas networks. Some may stay on and, in time, become proud Kiwis. As Education New Zealand notes:

New Zealanders also have an opportunity to learn from international students.

It’s critical that New Zealanders continue to grow their awareness of the value that international education brings the country; not only economically but also culturally.

However, there are some issues that go with this. International students are sometimes exploited – paid well below minimum wage to work in dodgy restaurants, or forced to live in substandard accommodation.

The boom-bust nature of the industry – especially for private providers – creates real risks, and a number of providers went out of business when the early 2000’s boom ended. That wasn’t good for New Zealand’s reputation, and hopefully the industry is better prepared for a downturn this time around.

21 comments to Auckland’s international student boom

  • Excellent post JP.

    Helps explain why this city is so much more lively this century than last. Go the youth.

  • Tom

    Patrick, exactly. The CBD is so wonderfully vibrant these days. I for one wouldn’t want it any other way. And I’ll take a few ugly apartments for the vibrancy any day.

  • Early Commuter

    There is some interesting treatment of statistics here. Excluding pre-2004 PTEs is shall we say “questionable” approach. Here are the official international enrolment figures (Education Counts) for all public and private providers in NZ for domestic students.

    1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
    11,856 16581 26,233 40,820 47127 50377 47281 42701 39973 39777 43385 45602 48069 47473 47987 53890

    – Yes, 2014 is the highest recorded year; but 2013 was lower than 2004!
    – There hasn’t been a steady upwards climb. There was a huge climb in the early 2000s due to small PTEs (often language schools). That fell apart from due to a few scandals.
    – While numbers have climbed from 2007, it hasn’t been steady; it’s been a set of stairs (rise, plateau, rise)

    Unfortunately, we don’t have provider numbers before 2007, so let’s look at Auckland for what we have (2x uni, 2 x polytechs) (note – this does NOT include PTEs):

    2007 2008 2009 2010 2011 2012 2013 2014
    Total 11674 11732 12228 12783 12859 13272 13751 14913

    Now, we can do a little bit of work to estimate total international enrolments for Auckland. We know that the 4 public providers account for ~38% of international enrolments. So, based on that, we can back-calculate the following public international enrolments in Auckland:

    1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
    3755 4870 7389 10981 13904 15327 14510 13042 11674 11732 12228 12783 12859 13272 13751 14913

    Now we can use historical ratios of public:private to estimate total AUckland international enrolments. We use the ratio of overall public:private for each year (as we have this at the national level and assume it will hold at Auckland level)

    1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
    4375 6118 9680 15063 17390 18589 17447 15757 11674 11732 12228 12783 12859 13272 13751 14913

    So, what we see is a massive climb to 2004, a steep drop off after 2006, and a slow, but steady climb since. If it’s a “boom” it’s yet to reach 2004/2005 levels.

    Limitations of the above
    -> PTE enrolments estimated by proxy
    -> Massey Albany not considered
    -> Wananga not considered

    • Thanks for the comments – complete pre-2004 data isn’t available at the regional level, which is why I’ve also looked at some other sources to fill in some of the blanks. I disagree that “if it’s a “boom” it’s yet to reach 2004/2005 levels” – the data you’ve got at the top of your comment shows 2014 enrolments higher than 2004-2005 levels for NZ as a whole, and my regional data suggests that Auckland’s share of students has risen significantly over that time.
      Plus, you’re referring to calendar year data from Education Counts. The 2015 data won’t be out for a couple of months, and 2014 is only capturing the early part of the boom (hence why I’ve also looked at MBIE’s data for 2014/15). It seems likely that 2015 will be another record, at both the Auckland and the NZ level.
      It might be possible to estimate Auckland’s pre-2004 enrolments using something like the approach you suggest, but the actual numbers you’ve given don’t match up with the post-2004 data. I think there are two factors here: 1) Auckland’s share rising over time may not be taken into account, and 2) the share of public vs private institutions fluctuates quite a lot, based on the rise and falls of PTEs and the like.

      On the whole, I think it’s very likely that Auckland’s enrolments are the highest they’ve ever been, although that’s probably not the case for the rest of NZ.

    • On a second look, the data you’ve got doesn’t cover all “international fee-paying students” – I’m not quite sure what you’re missing out. My regional data is from https://www.educationcounts.govt.nz/__data/assets/excel_doc/0019/147133/Export-Education-Levy-Full-Year-Statistics-2014.xlsx (esp Table 8) and https://www.educationcounts.govt.nz/__data/assets/pdf_file/0017/14732/International-Student-Enrolments-in-NZ-2000-2006.pdf to get the data back to 2004. They changed the system at that point so it’s not possible to go back further.
      Also from that dataset, NZ-wide enrolments peaked in 2002 at 126,919. By 2014 they were back to 103,321, and I’d expect they’ll rise a good whack for 2015, but still be lower than that peak. For Auckland, though, it’s likely that we *are* above that peak.

      • Early Commuter

        Source data is: https://www.educationcounts.govt.nz/__data/assets/excel_doc/0006/76659/Provider-based-Enrolments-2007-2014.xlsx

        That lists *formal* international education only – but that includes PTEs
        Tab ENR2 includes domestic/international at national level to 1999
        I used the four Auckland TEOs (UoA, AUT, MIT, Unitec) as my “public” providers for Auckland – see tab ENR35

        If we look at the ratio of public:total international from 99-14 we get a range of .86->.72
        If we look at the ratio of Auckland public to total public international 2007-2014 we get .37
        So we then multiply the total public numbers 99-06 by 0.37 to get our Auckland public estimates, which we then correlate with the national ratio public:private
        PPR = public private ratio (expressed as % public/total %)

        Auckland
        EstPublic Nat PPR Est Total Akl Est Pri Akl
        1999 3755 0.86 4375 620
        2000 4870 0.80 6118 1249
        2001 7389 0.76 9680 2291
        2002 10981 0.73 15063 4082
        2003 13904 0.80 17390 3486
        2004 15327 0.82 18589 3262
        2005 14510 0.83 17447 2937
        2006 13042 0.83 15757 2715

        This gives us reasonable estimates of private enrolments peaking in 2002 at 4082…

      • Early Commuter

        PS yes Auckland’s share rising over time but not substantially – 07-14 public providers/total public int
        0.358957014
        0.371089673
        0.362633452
        0.364291821
        0.362429538
        0.371973094
        0.378096731
        0.382551369

        • stu donovan

          Why are you acting like a jerk e.g. accusing john of questionable use of statistics? He used the data compiled by govt agencies – no shame in that. Yes their method of recording data changed but that’s not John’s fault. Id suggest you need to be more polite, and less arrogant.

          • Early Commuter

            Except that I also used the data collected by government agencies

            Let me explain
            A lot of people read this blog
            A lot of people take what is said on this blog as gospel
            A lot of people would read this post and think that Auckland is experiencing a record number of international students

            I’m not sure the psychological term – it isn’t dissonance – but people believing something is true even when it isn’t (“women cause more crashes!”) is really harmful.

            It’s better to point out that the graphs he’s posted above present an incomplete picture of the situation, and that Auckland is likely still below peaks of a decade before.

    • Early Commuter, thanks for putting me on to the ENR.2 table, which I hadn’t seen when I was originally looking for data. But I think it still supports my conclusions. It shows international student numbers peaking in 2004 (similar to my second graph), at the NZ level. It also shows that they made it back above that peak in 2014 (and, based on the data I’ve shown in my post, likely to rise again in 2015).

      The data you’ve linked to doesn’t have good regional information, so there’s a lot of manipulation required to try to get figures for Auckland. It seems like what you’ve done is look at just the two unis and polytechs in Auckland, and tried to extrapolate that in two ways – firstly to go back past 2007, and secondly (and I think this is more prone to large uncertainties) to estimate students in the PTEs as well.

      The other thing that seems odd in your initial comment is that you’ve shown that student numbers are now above their 2004 peak at the national level (the first line of data you quote), but you’ve gotten a different result at the Auckland level. But it seems like you’ve gotten one of your calculations wrong – the third and fourth line of data you quote show the same results for 2007 onwards, i.e. I think you may have forgotten to scale up your estimates in the last data there (i.e. you’ve said the figure of 14,913 in 2014 relates to just public enrolments, but then you’ve also said it includes *all* enrolments in Auckland). This seems to be a formula error.

      Whereas I haven’t had to manipulate my data at all – it’s exactly as reported in the data sources I linked. It only goes back to 2004, but it clearly shows Auckland enrolments in 2014 above 2004 levels – which is likely to have been the previous ‘peak’ – and of course, 2015 will be higher again.

  • Brendon Harre

    The earthquakes hammered Canterbury’s international student market.

    The Reserve Bank wrote about it in there five year post earthquake report. http://www.rbnz.govt.nz/-/media/ReserveBank/Files/Publications/Bulletins/2016/2016feb79-3.pdf

    See figure 22.

    The government doesn’t seem to have any plans to fix Canterbury’s international student and tourism sectors that are both well down compared with pre-quake.

    The government has benefited from the $10s of billions in insurance payouts when the economy was looking dodgy post GFC, but what have they done to improve Canterbury’s or NZ’s long term problems?

    • Greg N

      Yes Brendan, the government has plans to fix the tourism sector and international student sector problems, thats why they’re building a convention centre.
      And one day it will happen, when they find a private operator dumb enough who can cleverly figure out how to build it for the price they’re offering to pay.

      And everyone know that tourists just flock to convention centres in huge numbers from all over the globe, especially if they can also gamble there. 🙂

      Students – well they’re gonna get a much needed library smack bang in the centre of the destruction zone, disaster area, location that was formerly known as Cathedral Square.
      And they can swim and play sports in the new multi-sport building, once that gets built…

      • Brendon Harre

        Yeah it is a situation where black humour is the alternative to becoming very depressed….In non black humour or depressed moments I keep having these optimistic thoughts like the government suddenly realising that a rapid transit service for Canterbury would be better investment than a monstrous $284 million building that is empty five days out of seven.

  • Boom & bust, just compare student numbers with exchange rates.

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