Australia’s big four cities set to capture two-thirds of population growth by 2041

The pendulum is swinging back from regional to urban areas in Australia, as a new demographic forecast predicts that over 65% of the country’s population growth by 2041 will be concentrated in the major cities of Sydney, Melbourne, Brisbane, and Perth.

In an exclusive release by Informed Decisions (.id), a wholly-owned subsidiary of PEXA, it’s predicted that Australia will need an additional two million homes in these urban centres to accommodate an estimated population increase of 7.4 million people.

Return of urbanisation driven by work and study

After a brief period of significant growth in regional Australia, fuelled by the COVID-19 pandemic and remote work trends, urban centres are regaining momentum. The shift back to cities is largely due to the availability of job and educational opportunities, as well as higher concentrations of individuals in their family-forming years.

Lailani Burra, CEO of .id, noted that the brief regional growth was mainly due to people not leaving rather than new arrivals. “COVID and university lockdowns interrupted the typical flow of young people from regional to urban areas,” she said.

Importance of planning and infrastructure

With urban population growth set to surge in the next two decades, Burra emphasises the critical need for well-planned housing, infrastructure, and services. To this end, .id has spent nearly 15 years compiling a comprehensive dataset that identifies potential development sites across Australia, categorised by location and capacity.

Key insights by state

Victoria is expected to add 2 million people, primarily in Greater Melbourne, necessitating 723,000 new dwellings.
New South Wales is set to gain 1.7 million residents, with 1.2 million in Greater Sydney, requiring 582,000 additional homes.
Queensland will see a 1.6 million increase, mainly in Greater Brisbane, calling for 381,000 more residences.
Western Australia’s population will grow by 900,000, concentrated in Greater Perth, which will need 334,000 new homes.

Tasmania faces the unique challenge of a demographic imbalance as young people move to the mainland, while the retirement-aged population continues to grow. Meanwhile, the Sunshine Coast is expected to triple its retirement-aged population in the next 25 years.

A granular look at future growth

According to Ms Burra, the new dataset allows for detailed planning at the community and suburb levels. “Overseas migration will have a varied impact across different communities. Our data can show when and where growth is likely to occur, the demographic changes to expect, and the number of houses needed,” she said.