No, residents do live there year-round, but there's a somewhat famous saying that "it's illegal to die on Svalbard." The truth behind this is that the medical facilities on Svalbard are very, very limited, basically just a clinic. So if you are healthy and capable of caring for yourself, you can stay indefinitely, but otherwise you have to leave. I thought there was also a maximum age, above which you have to leave, but I can't find anything about that now.

Most people stay on average 7 years and tend to be younger. It's a place where a lot of people move during a time in their lives where they're looking for a new start or to escape their old life.