Melbourne remains on track to overtake Sydney as the country’s largest city within the next decade, according to new modelling.
The Federal Government’s Centre for Population released it’s 2022 Population Report today, revealing the locations set to see the largest influx of new residents over the next decade, while also outlining the impact of the COVID-19 pandemic on Australia’s population growth.
The report, which details population projections for all of Australia’s capital cities, shows Melbourne should become the nation’s most populous city in the next 10 years despite a significant reduction in its population growth during the pandemic.
By June 2033, Sydney will have a population of 6,062,400, while Melbourne will have a population of 6,101,100.
Australia’s total population is set to hit 29.92 million by June 2033.
The size of Australia’s population is expected to be 1.2 million people (or 4 per cent) smaller in 2030–31 compared with what was projected in the Budget year immediately prior to the onset of the pandemic, the report states.
While most states and territories experienced a drop in population growth early in the pandemic, the report predicted the majority of locations would return to similar patterns of population growth to that experienced pre‑pandemic.
Victoria and Queensland are predicted to be the fastest growing of the three largest states over the next decade, while NSW will grow at a slower rate despite being projected to remain Australia’s largest state with a population of 9.1 million in 2032–33.
Pandemic hit cities hardest
The report shows the pandemic had a larger impact on city populations when compared to regional areas.
In 2020–21, population levels declined 0.3 per cent in the capital cities while population growth in regional areas fell to just 1 per cent.
Despite this, capital cities are now forecast to return to higher growth rates than the regions from 2021–22 as overseas migration returns.
South Australia and Tasmania are expected to continue to be older than other states, and rest-of-state areas (except for the rest of the Northern Territory) are expected to continue to be older than capital cities.
Migrant arrivals back up
International travel restrictions resulted in a net outflow of 85,000 overseas migrants from Australia in 2020–21, according to the report.
In the wake of easing restrictions, overseas migration has returned quickly and is expected to recover to the pre-pandemic trend of a net inflow of 235,000 people from 2022–23.
But this rate of inbound migration will not be enough to offset the population growth lost during the pandemic, with Australia “expected to remain smaller and older than would have otherwise been the case”, the report stated.
The report found that the recovery in overseas migration figures is largely being driven by a rebound in international student numbers.
In mid-October 2022, there were 122,000 more international students in Australia than in mid-December 2021.
The outlook for student arrivals in 2022–23 is also positive, with offshore student visa grants from January to October 2022 the highest they’d been since the 2006 calendar year.
This may partly be driven by an extension of unrestricted working rights for overseas student, set to expire in June, which may have contributed to a short-term rise in migration demand.
What’s next for the tree-change trend?
Capital cities and regional areas are “projected to return to normal patterns of
population growth as net overseas migration returns and internal migration returns to pre-pandemic patterns”, according to the report.
Regional areas gained 31,000 people from capital cities in 2019–20 and 49,000 in 2020–21, up from 16,000 in 2018–19, in part due to a trend of people moving to the regions for “lifestyle reasons”, according to the report.
Net internal migration to regional areas is projected to drop to 23,000 in 2023–24, due to “increased moves from regional areas to capital cities as pre-pandemic trends of young people moving for education and employment resume”.
Internal migration is then projected to slowly increase to 43,000 by 2032–33 as a result of overall population increases.