Melbourne will be Australia’s largest city by the 2030’s

Melbourne is set to become Australia’s largest city by the 2030’s according to demographer Bernard Salt.

And that’s not really that far away, is it?

If these forecasts pan out, and they are likley to be correct, they will underpin the strength of the Melbourne property market and deliver surety to  investors who own property in the right locations

What’s all this about? Melbourne

In an article in The Australian last year, Salt Explains that Melbourne is set to become the nation’s most populous city by the 2030’s because it can offer what Sydney cannot – access to affordable housing on the urban fringe.

According to ABS forecasts Melbourne’s population will pass the 5,000,000 mark by 2021, and due to strong population growth in the city’s West (less than 40 km from the CBD) Melbourne’s population should surpass Sydney’s in less than 20 years.

Melbourne's population growth

Source: The Australian

Let’s look back a little

Melbourne was  the last of the mainland capital cities to be settled – in 1836. 

But because of the gold rush in the 1850’s Melbourne quickly became Australia’s biggest city.

By Federation both cities were about the same size: half a million people each.

100 years later, at the end of the 20th century Sydney had 600,000 residents  than Melbourne, but as you can see from the following graphic, this lead has narrowed to closer to 350,000 and is narrowing at a rate of 20,000 a year.

Assuming this trend continues, Melbourne will become Australia’s largest city at some point in the 2030s.

Melbourne's population growth1

Source: The Australian

In the year to June 2016 Melbourne added 108,000 residents.

Historically, this is the highest population growth Melbourne has ever experienced  they couldn’t all fit into the MCG!

 Over the same period, Sydney added 83,000  people.

Why is Melbourne attracting more growth than Sydney?  Melbourne-vs-Sydney

Melbourne offers what Sydney cannot or will not offer: access to affordable housing on the urban fringe.

Melbourne planned for growth from the Kennett years resulting in the formation of a plan for five million residents at 2030 and announced in 2002.

Either way, Sydney’s lead is now closer to 350,000 but is narrowing at a rate of 20,000 a year.

If present rates were to continue Melbourne would replace Sydney as Australia’s largest city at some point in the 2030s.

Why is Melbourne growing faster than Sydney?

 In the past, Melbourne was the manufacturing and union heartland of Australia.  Melbourne property skyline

Today it has become an important financial and educational hub creating more full-time jobs than any other city in Australia.

However, Bernard Salt puts it down to the fact that Melbourne offers affordable housing close to the city urban fringe – something that Sydney cannot.

And with the cost of Sydney housing booming, the better Melbourne looks.

 Much of Melbourne’s growth is occurring to the city’s West but there is still substantial growth in Melbourne’s south-eastern corridor.

 Of course this significant growth will create infrastructure and social problems, but that a good topic for another blog.

A warning for property investors! A warning for property investors

 Just because Melbourne’s population is going to grow significantly, that doesn’t mean all properties will increase in value equally – in fact they won’t.

Strong population growth doesn’t necessarily lead to capital growth.

Melbourne’s  population growth at the city fringes will lead to infrastructure and transport problems, making properties in the inner and middle ring suburbs  close to transport even more appealing.

 If you want to take advantage of the opportunities Melbourne’s property market will offer, will be critical to own investment grade properties.


Are you going to take advantage of the property markets in 2017 or are you going to get caught by the traps ahead? 

If so and you’re looking for independent advice, no one can help you quite like the independent property investment strategists at Metropole.

Remember the multi award winning team of property investment strategists at Metropole have no properties to sell, so their advice is unbiased.

Whether you are a beginner or a seasoned property investor, we would love to help you formulate an investment strategy or do a review of your existing portfolio, and help you take your property investment to the next level.

Please click here to organise a time for a chat. Or call us on 1300 20 30 30.

When you attend our offices you will receive a free copy of my latest 2 x DVD program Building Wealth through Property Investment in the new Economy valued at $49.


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Kate Forbes


Kate Forbes is a National Director Property Strategy at Metropole. She has 15 years of investment experience in financial markets in two continents, is qualified in multiple disciplines and is also a chartered financial analyst (CFA).
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