Prime Minister John Key says increasing confidence in the economy is encouraging New Zealanders to stay at home rather than cross the Tasman for work.
Net migration figures have hit their highest level in a decade, and the country had a seasonally adjusted net gain of 2800 immigrants in September.
Mr Key says the figures are a sign of success and mean fewer people are going to Australia and increasing confidence in the economy.
That will be further boosted by falling unemployment he says. "We see the unemployment rate falling, a lot of the predictions we see from Treasury, Reserve Bank and others, is that unemployment will likely have a five in front of it in the foreseeable future."
The Prime Minister concedes the higher numbers of people moving to New Zealand may put further pressure on the housing market.