Source: Centre for Population
Much to Sydneysiders’ dismay, the Population Statement also sees Melbourne toppling Sydney’s crown as Australia’s most populous city by 2031.
Melbourne suffered a harsh exodus during the pandemic, with population growth decimated by not only a net outflow of overseas migrants, but also that of interstate migrants. Historically, net interstate migration (NIM) has contributed approximately 0.2% to Victoria’s population growth; comparatively in 2020-21, NIM detracted 0.3% from Victoria’s population growth, the lowest contribution since the 1990s.
The Population Statement believes that the net outflow of NIM from Victoria will slow from 18,000 in 2020-21 and 17,000 in 2021-22 to just 6,000 in 2022-23, before reverting to pre-pandemic inflows from 2023-24 onwards.
NSW also recorded historically low NIM during the pandemic years, reaching an estimated 40,000 in 2021-22 and subtracting 0.5% from population growth. The Population Statement projections do not bode well for NSW– net population outflows of 23,000 per annum subtract 0.3% from population growth from 2023-24 onwards.
Victoria is projected to take a disproportionately large share of net overseas migration (NOM) – absorbing 34% of NOM despite making up approximately 25% of Australia’s population.
Demographers at Macquarie University have observed that there is also a trend of recent overseas migrants moving to Melbourne after a temporary stint in Sydney. Hence, while the Population Statement believes NSW will remain the gateway for many incoming travellers to Australia, affordability and congestion challenges mean the state may have trouble retaining its new arrivals.
For now, the strong rebound in NOM nationally may squeeze already tight rental and housing markets. This may be a particular issue for Melbourne, with the Population Statement expecting NOM to contribute around 70,000 people per annum to Melbourne’s population.
This blog was co-authored by David Li, a Vacationer in Deloitte Access Economics.