Are people leaving Sydney and Melbourne in droves?

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It seems that not a week goes by without reading an article that highlights the sea/tree change phenomenon.

People Leaving

The tone of these articles suggests that people are leaving Sydney and Melbourne in such numbers that the streets are devoid of people and life – save the obligatory tumbleweed.

Recent ABS data releases on internal migration have meant that more timely analysis of the ebbs and flows of people around the country is possible.

So what exactly is happening?

Let a demographer, not a property analyst, put it all into context.

Internal migration trends in Australia

There’s no doubt that there have been substantial changes in Australia’s internal migration patterns over the last few years.

Some of these have been emerging over time, while others are more closely tied to the onset of the COVID-19 pandemic.

For instance, Western Australia was losing population interstate for a number of years, but over time the losses have diminished and now there are small net flows into that state.

Queensland’s net internal migration figures have been increasing for the last few years, and even more so in the last 12 months.

On the other hand, Victoria has gone from a situation of net gain from internal migration, to a net loss, in a short space of time.

One of the more interesting things about the last twelve months has been that there has still been a substantial amount of migration across and within state borders.

Interstate migration is intriguing in light of some hard lockdowns, particularly during the second wave in Victoria.

ABS data shows that the total volume of interstate migration in 2019 was one of the highest on record and that the 2020 figure was only about 10% lower.

The volume of interstate migration in 2020 was similar to levels recorded in the mid-2010s.

In other words, there’s still a lot of people moving around the country despite lockdowns and economic uncertainty.

Interstate migration trends in NSW and Victoria

The chart below shows arrivals and departures in and out of Victoria and NSW since 2002.

Though net figures are important because they directly influence population change, the size of the flows provides another perspective.

Interstate migration trends

Interstate migration in NSW has historically been characterised by more departures than arrivals, resulting in a net loss of population to other parts of Australia.

The net loss was as little as -5,580 in 2014, but it has been as higher than 30,000 (2002 and 2003).

In 2019, net interstate migration loss in NSW was -22,450, and this decreased slightly to -18,870 in 2020.

Both the number of arrivals and departures declined in 2020.

In Victoria, interstate migration trends have followed a different path in the 21st century.

Historically, the state has recorded a loss of persons interstate, however from 2009 there was a period of increasing net gains from other parts of Australia.

People Moving The Country

This came to a crashing halt in 2020.

As we know Victoria was hit very hard by the COVID-19 pandemic and there was an extended lockdown in the second half of the year.

In 2019, Victoria recorded a net gain of 10,650 persons via interstate migration.

In 2020, the trend reversed dramatically, with a net loss of 12,740 persons.

However this was driven by a 25% decline in arrivals, from 87,880 in 2019, to 65,960 in 2020.

At the same time, departures increased modestly by 1.9%.

In other words, it was a decline in people not moving to Victoria that drove the trend more than the other way around.

Internal migration trends in Sydney and Melbourne

However it’s the numbers of people moving out of Sydney and Melbourne that have gained the most attention.

Commentators have suggested that the pandemic, associated lockdowns, and the ability to work from home have created the momentum for people to move to regional areas.

The chart below shows intrastate arrivals and departures in and out of Sydney and Melbourne since 2002.

Intrastate arrivals

The data shows that both cities have a history of net intrastate migration loss ie people moving to other parts of the state.

However, these are trends that pre-date the COVID-19 pandemic.

Departures from Greater Sydney and Greater Melbourne have been increasing since 2014, so clearly other drivers are at play.

For instance, in 2014 a total of 25,850 persons left Greater Melbourne for other parts of Victoria.

The number has generally increased each year since, reaching 41,390 in 2020 i.e. a 60% increase.

Part of the narrative surrounding moves out of Sydney and Melbourne is that working from home breaks the nexus between place of residence and place of work.

This means that there is greater freedom with respect to where people might choose to live, regardless of where their workplace is located.

Choosing A New Place

While this is quite logical, it does oversimplify the situation.

The technology to work independently of your place of work has existed for some years (hello to the digital nomads out there), it’s just taken a pandemic to shake things up for everyone else.

But the fact remains that not all jobs can be done from home.

The upcoming Census will provide a more contemporary perspective on both migration trends and the characteristics of people who work from home.

It’s also worth considering that large-scale flows out of Sydney and Melbourne are tempered by housing supply constraints in regional locations.

Despite increasing numbers of property sales across both metropolitan and regional areas in the last twelve months, other data from CoreLogic shows that property listings in regional Australia are considerably lower in 2021 when compared with previous years.

This follows a year of steady decline throughout 2020, particularly after April.

This may partially explain lower movement out of regional NSW and Victoria.

Combined regional dwelling

Migration trends are also strongly related to age and stage of life, eg moving out of home, retirement.

Typically, young adults are highly mobile compared with other age groups, but overall the migration patterns of 15-44 year olds have driven the changes in Victoria in the last twelve months.

For instance, there was a net gain of almost 2,900 people aged 15-44 years in the Dec 2019 quarter.

The equivalent figure for the Dec 2020 quarter was a net loss of -2,760 persons.

This has implications for 0-14 year olds, whose migration decisions are based on those of their parents.

Dec 2019 quarter data for this age group shows a modest gain of 47 persons, compared to a loss of -1,710 in Dec 2020.

Summary

MigrationMore recent internal migration data has confirmed some substantial shifts in the way people are moving around the country.

Some of these trends pre-date the pandemic, others are more closely tied to it.

Media commentary has focused on the movement of people out of Sydney and Melbourne in particular.

But the data shows that increasing numbers of people have been moving out of these cities for several years.

What has changed is that arrivals to Victoria from interstate, and arrivals to Melbourne from regional Victoria, have declined more than the increase in numbers leaving.

In other words, these new trends are driven by people not moving to Victoria and Melbourne.

The upcoming Census will shed more light on the migration patterns, particularly at smaller levels of geography.

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About

Simone Alexander is a demographic consultant with more than 20 years of experience working in both the public and private sectors. She uses her expertise to blog about demographic trends, housing and planning issues in Australia’s cities and regions.
Visit demogblog.blogspot.com


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