Cities mop up population growth as regions stall

Cities dominate population growth

If you’ve been reading this blog for a few years now, you may recall that although it wasn’t the central hypothesis or base case, I have previously highlighted a possible scenario whereby a dearth of employment opportunities and infrastructure investment could see population growth in regional Victoria fall to zero over the next few decades. trend demographic age population demographic people increase

Well, we aren’t quite there yet, but strewth we’re getting pretty close, and much sooner than had been anticipated.

The big picture for Australia is that according to the ABS Population growth is steadily becoming more capital city focussed over time, with the share of our resident population accounted for by the capital cities hitting its highest ever level in financial year 2015.

The respective capital cities accounted for a remarkable 92 per cent of population growth in Victoria, 92 per cent in Tasmania, 93 per cent in South Australia, and an incredible 94 per cent in Western Australia.

Australia is centralising

By contrast regional population growth has slowed to just +0.7 per cent, and virtually all of this growth was seen in inner regional areas, with outer regional and remote areas witnessing flat or falling populations in aggregate.

In short, Australia is centralising.

Greater Melbourne recorded the fastest absolute population growth at +91,300 or +2.1 per cent in the year to June 2015, although with population growth of +83,300 Greater Sydney wasn’t all that far behind, and as such the harbour city will win the race to 5 million at a canter.

In fact, Sydney’s population will pass 5 million within a matter of only weeks from today.

Greater Brisbane and Greater Perth each recorded population growth rates of +1.6 per cent, well ahead of Adelaide and Hobart which added a total only +13,800 heads between them.


All up capital cities accounted for population growth of +261,300 which was 83 per cent of the Australian population growth, while more than three quarters of the increase in headcount was to be found in the four most populous capitals.

Eight of the ten most densely populated areas are now to be found in Sydney and five of them around the harbour city’s Central Business District, and with Ultimo-Pyrmont the densest population of all at 15,100 per square kilometre.

Regional population growth is stalling

While New South Wales has some regions that are growing such as Wollongong, Newcastle & Lake Macquarie, and the Hunter Valley, at the SA4 level none of them is growing as fast in percentage terms as Greater Sydney.

Meanwhile population growth in regional Victoria has continued to slow from more than +15,000 per annum in financial year 2010 to just +7,778 in 2015, with the population already in outright decline in a number of regional areas.

In fact, if you strip out growth of +1.9 per cent or +5,224 in Greater Melbourne’s “nearby” city of Geelong, then regional population growth in Victoria is already pretty much close to zero, although the wider Bendigo and Ballarat regions did record a small amount of growth.

The story is largely one of stagnation rather than anything more dramatic than that.

The population of the Creswick-Daylesford-Ballan region increased by one (1) in financial year 2015. Maryborough-Pyrenees saw its population fall by one.

The entire Shepparton region, once a hub for robust employment and population growth, increased by 91 heads. The total population of Mildura fell by 3 (three), thereby contributing ever so slightly to an overall population decline of 1,030 or -0.7 per cent in North West Victoria.

Meanwhile the Warrnambool and South West region saw its population decline by 822 or -0.7 per cent, and Deakin University is considering closing its local university campus, a potentially devastating blow for regional students and the local community (especially given that population increase for the remainder of the decade is projected to be driven largely by international students).

On the other hand Greater Melbourne is becoming a veritable magnet to regional Victorians and folk from interstate alike.


Note that if you drill all the way down to the individual suburb level, some attractive capital city locations will naturally experience a slight “decline” in population, but you shouldn’t be sucked into believing reports that these equate to “declining” demand for housing therein – often it is quite the opposite, in fact, these subtle shifts in household formation are simply a part of the life cycle of mature and well established suburbs.

Queensland coast thrives

Only one state records reasonable population growth of +1.0 per cent in its regions, that being Queensland (compared with +0.8 per cent in New South Wales, and +0.6 per cent in Victoria, while in the regional Northern Territory population growth was negative).population

The migration data broken down by median age implies that both the Gold Coast and Sunshine Coast are attracting families to live in their attractive conurbations, with some electing to commute into Brisbane for employment, while these regions are also enjoying a welcome boost from tourism and the lower Aussie dollar.

While it is hard to envisage today, and planners claim it cannot or will not happen – if you could build a time machine and travel forward to a point in the not too distant future – Greater Brisbane and south-east Queensland may be something akin to one 200 kilometre long coastal city stretching “from Noosa to the Tweed”.

In other words, Gold Coast and Logan could become indistinguishable, and the Sunny Coast may be linked to Brissie and Ipswich by urban sprawl. I’m assured that this could never happen, though!

Regional slowdown

While population growth rates remain furiously strong in the largest capital cities, the slowdown continues in most regional locations.

We can expect this trend to continue over the next few decades, and if you want to know the reasons why, I recommend taking a read of Infrastructure Australia’s latest reports. population

Slow population and employment growth is one thing, but if you want to see a demographic and property market disaster in action, take a look at what has been happening to the demogrphics in many of our mining and resources regions.

Population is actually in full on decline mode in resources regions such as the Pilbara and Goldfields in Western Australia, as well as in the Queensland Outback.

Significant demographic challenges have been unfolding in parts of the Central Highlands of Queensland, just south of the Bowen Basin, where population growth has been in freefall, and in parts of the Bowen Basin North where population growth has collapsed.

For property salesmen and marketers some of these small towns can be a classic sucker play – rising population and dwelling prices through a resources construction phase can lead to over-enthusiastic development, and then as the population and demand flows away again what is left is overvalued and illiquid property, but few people ready and willing to buy or live in it.

Want more of this type of information?

Pete Wargent


Pete Wargent is a Chartered Accountant, Chartered Secretary and has a Financial Planning Diploma. He’s achieved financial freedom at the age of 33 - as detailed in his book ‘Get a Financial Grip – A Simple Plan for Financial Freedom’. Pete now manages his investment portfolio, travels and works as a consultant in the finance industry from time to time. Visit his blog

'Cities mop up population growth as regions stall' have 1 comment

  1. April 6, 2016 @ 10:54 am Tom

    Hi Pete, interesting article. Just wanted your thoughts about the following comparisons with the smaller inner city suburbs v NSW close regionals to Sydney. In specific terms:

    Lake Macqaurie/ Katiomba/ Bowral v inner city Adelaide (Say Norwood or Burnside) or Tas- Sandy Bay
    What’s your view with these comparisons. If you had choose at present day around the 500k mark.


Would you like to share your thoughts?

Your email address will not be published.



Michael's Daily Insights

Join Michael Yardney's inner circle of daily subscribers.

NOTE: this daily service is a different subscription to our weekly newsletter so...