By Michael Yardney January 7, 2026

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Six Years On: How COVID Fast-Forwarded Australia’s Future

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Six Years On: How COVID Fast-Forwarded Australia’s Future

Key takeaways

The Covid pandemic didn’t create new demographic trends; it simply pushed existing ones into overdrive.

Fertility continued to fall, the population aged faster, and our dependence on migration deepened.

In other words, COVID didn’t rewrite our destiny; it hit the fast-forward button.

The expected “lockdown baby boom” never happened — uncertainty and financial stress saw fertility drop instead.

Meanwhile, as deaths increased and births slowed, migration became our primary driver of population growth and economic momentum, a reliance that will only intensify over the next decade.

Remote work encouraged people to leave inner cities for the suburbs and regional Australia.

But with Baby Boomers staying put in their family homes, there’s a persistent shortage of mid-sized housing, a key reason property prices remain high and will likely stay elevated.

A shrinking workforce, ageing population, and strong spending from Boomers and Millennials are keeping inflation elevated.

As Simon Kuestenmacher noted, these are demographic, not cyclical, forces, meaning higher inflation and interest rates are likely here to stay.

Back in early 2020, when we were told to “stay home,” none of us really knew what that meant for the long term.

Would COVID change everything forever? Would cities empty out? Would we see a baby boom, a population collapse, or a permanent shift to remote work?

Now, nearly six years later, we finally have enough data to separate myth from reality.

The pandemic didn’t rewrite Australia’s future, but it did hit the fast-forward button on trends that were already underway.

It changed when things happened, not what was going to happen.

From declining fertility and labour shortages to booming household spending and sticky inflation, the pandemic acted like an accelerator, speeding us toward a more complex, more expensive, and more demographically divided Australia.

As I discussed with demographer Simon Kuestenmacher on our latest Demographics Decoded podcast, the data now tells a fascinating story of a nation that’s ageing, growing more reliant on migration, and still grappling with the aftershocks of a once-in-a-century disruption.

“The pandemic didn’t change our demographic destiny, it just pressed fast forward.”

Those were Simon’s words, and they perfectly sum up what we’ve seen since 2020.

“The pandemic sped up developments that were already in motion,” he explained. “You’ll always see the COVID bump in the data, spikes up or down, but the direction hasn’t changed. Australia’s path was set long before COVID arrived.”

That path includes:

A falling birth rate that started well before the lockdowns.
An ageing population as baby boomers move into their 70s and 80s.
A growing dependence on migration to sustain our workforce.
A widening wealth gap between generations.
And a structural skills shortage that’s now baked into the economy.

COVID didn’t create these forces; it amplified them.

Six Years Later: What Covid Did to Our Population, Jobs, and Future

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The Baby Boom that never happened

Remember those confident predictions of a “lockdown baby boom”?

The logic went: if we’re stuck at home, there’ll be more babies nine months later.

But as Simon puts it, “We spent more time watching Netflix than making babies.”

Instead of a boom, we saw a further fall in fertility, continuing a long-term trend.

Births declined as uncertainty about health, jobs, and the economy made couples delay or cancel plans to have children.

“Starting a family is about confidence,” Simon said. “You only have kids when you’re confident about the future — and the COVID years were the most uncertain period in decades.”

Yet, interestingly, total birth numbers didn’t collapse as much as expected because the largest generation in history, the millennials, were entering their family formation years.

So while the rate dropped, hospitals still saw plenty of births.

As Simon noted, “If you ask a midwife about those years, she’ll tell you she was very, very busy.”

This is a reminder that demographic change isn’t just about rates, it’s also about who’s of baby-making age at the time.

And with millennials dominating that phase, the nation’s population still grew, just in a more uneven way.

Mortality and the hidden toll

Australia’s pandemic experience was far milder than many feared.

Between 20,000 and 30,000 excess deaths occurred; tragic, but far below early worst-case models.

“The lockdowns worked,” Simon says, “at least in the short term.”

But the long-term impacts on mental health, inequality, and future life expectancy, are harder to quantify.

“We’ll need decades of data to see if poorer Australians, who were hit hardest economically, end up living shorter lives.”

Meanwhile, as the population continues to age, deaths are now rising steadily each year, not because of COVID, but because of demographics.

The oldest baby boomers are now in their late 70s, moving into an age bracket where health declines naturally accelerate.

Migration: Australia’s lifeline

The other big driver of population change, migration, tells a story of collapse and rebound.

During lockdowns, Australia recorded its first-ever negative net migration since Federation.

Then, when borders reopened, arrivals surged to record highs, twice the previous record, Simon notes, as the country played catch-up.

Now, things have largely stabilised near pre-pandemic levels.

But the long-term direction is clear: with fewer births and more deaths, migration will be our main source of population growth.

“Once millennials finish their baby-making years in the next decade,” Simon says, “we’ll see an even smaller cohort entering the population naturally. So migration will become even more critical to sustain economic growth and fill jobs.”

That reliance is already reshaping our cities, with demand for housing, infrastructure, and services far outpacing supply.

How COVID shaped each generation

COVID affected every generation differently, creating lasting ripple effects through society and the economy.

Children (0–8 years)

We now have fewer young children than before the pandemic.

Yet demand for childcare has surged because both parents are working to manage higher living costs.

“That’s the irony,” Simon said. “Fewer kids, but more demand for childcare.”

Teenagers

This group missed crucial years of social development.

“We parked them in their bedrooms when they were meant to learn from their friends,” Simon observed.

Many are now entering the workforce lacking the soft skills that come from real-world socialisation.

Employers will need to “retrain” them in workplace basics: communication, collaboration, responsibility.

Young Adults (20s)

COVID froze the best years of their social and career lives.

Travel stopped, nightlife vanished, and many worked in industries like hospitality that were hardest hit.

As Simon puts it, “This cohort was robbed of its coming-of-age years.”

They’re now catching up, socially and financially, and delaying family formation as a result.

Millennials (30s–40s)

Millennials were right in the middle of family formation.

They bought homes, had babies, and became the biggest spending cohort in the economy.

“That phase of life is inflationary by nature,” Simon explained. “You buy cars, prams, furniture, food — everything.”

This spending power is one of the demographic drivers keeping inflation and interest rates higher than many expect.

Generation X (40s–50s)

This smaller generation is caught in the squeeze.

Many upgraded homes during the pandemic when interest rates were ultra-low, often overextending.

Now, with higher repayments, teenage kids, and ageing parents, they’re feeling the pressure.

Yet defaults have remained low because Australians have found ways to adapt and prioritise repayments.

Baby Boomers (60s–70s)

Many Boomers retired during COVID and feel “cheated” of two good years of travel and freedom.

But they remain wealthy, healthy, and ready to spend — particularly on lifestyle, leisure, and wellness.

“They’re the best customers a business could wish for,” Simon quipped. Their spending power, alongside the millennials’, is helping sustain demand, but also inflation.

The great migration within: city to suburb to region

Remote work has caused the largest population redistribution in decades.

People discovered they could live further from CBDs, so they moved to outer suburbs and regional areas for space and affordability.

But Simon argues this shift wasn’t entirely new:

“Even without COVID, millennials who started families would have left the inner city. The difference is that the pandemic made it socially and professionally acceptable to do so sooner.”

Boomers, meanwhile, didn’t vacate their large homes as many policymakers hoped.

“Australians don’t downsize,” Simon said. “They stay put. And as long as they do, millennials looking for family homes will be forced to the fringe.”

Note: This mismatch, a locked-up supply of mid-suburban homes and a surge in family demand, remains one of the most important structural forces behind rising property prices.

Sticky inflation and labour shortages: the demographic connection

Everywhere you look, businesses are struggling to find staff. That’s not a temporary problem, it’s demographic.

For decades, every Boomer who retires takes skills and experience that can’t be easily replaced.

Meanwhile, younger generations spend longer in education and enter the workforce later.

Add to that parental leave and restricted migration during COVID, and you’ve got a perfect storm.

“The result,” Simon said, “is a permanently smaller pool of available workers.”

And when labour is scarce, wages rise, feeding into sticky inflation.

This, in turn, keeps interest rates higher for longer, not because of short-term monetary policy, but because of underlying demographics.

What it all means for investors and business owners

As I've already explained, COVID didn’t change the game, it just sped it up.

Australia will continue ageing, creating long-term demand for healthcare, retirement housing, and services for older Australians.
Migration will remain essential, driving population growth and reshaping housing demand, particularly in our capital cities.
Labour shortages will persist, supporting wages but also keeping inflation stubbornly high.
Millennials and Boomers will dominate spending, ensuring certain industries: housing, childcare, travel, and lifestyle, thrive.
And property markets will remain under pressure, as demand continues to outstrip supply in family-oriented suburbs.

For investors, these are not short-term cycles; they’re long-term demographic realities.

The big picture

Six years on, COVID didn’t create a new Australia; it accelerated the one we were already becoming.

We’re older, more dependent on migration, more urbanised on the fringes, and facing a tight labour market for the long haul.

But we’re also a nation of adaptors; we moved online, restructured our work lives, and kept the economy surprisingly resilient through one of the biggest shocks in modern history.

As I often say, demographics are destiny.

Things don’t move fast until something forces them to. COVID did just that, pushing us headlong into the next phase of our nation’s evolution.

Tip: For investors and business owners, the message is simple: watch the demographic currents. They explain more about housing, inflation, and the economy than any quarterly forecast ever will.

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