New figures reveal a net migration loss of more than 3000 people in the year to June 2012 - the first such loss in almost a decade.
In its report on migration trends, the Ministry of Business, Innovation and Employment says New Zealand lost a net 3200 people, with many heading to Australia.
The net loss to Australia rose from 30,500 over the 2011 financial year to 39,700 a year later.
But the report says the trend is now reversing and it expects a return to positve net migration in 2014.
Other figures show India has overtaken the United Kingdom as the largest source of skilled migrants to New Zealand.
The report says that is the result of former Indian students going onto temporary work visas and later becoming permanent residents.
The report also shows an 11% decline in the number of skilled migrants applying for visas over the period.