Australia’s capital cities are set to see explosive growth over the next decade, cementing their position as the busiest, most populated areas in the country. Despite ongoing efforts to encourage migration to regional and rural areas, Australia’s major cities—Sydney, Melbourne, Brisbane—will continue to absorb the lion’s share of the population boom.

Treasury’s annual population forecast reveals that capital cities will grow nearly twice as fast as regional areas by 2034-35. This trend will significantly impact housing, infrastructure, and political dynamics as more Australians flock to the urban centres.

Key Trends in Australia’s Population Growth

Growth Slowing, But Big Cities Keep Leading

Australia’s population growth is expected to ease from the rapid 2.5% surge recorded during the pandemic in 2022-23 to 2.1% in the coming year. By 2026-27, the population will grow to 28.4 million, with predictions for long-term growth reaching 41.2 million by 2064-65. However, despite a slowdown in overall growth, capital cities will continue to attract the most people.

Migration: The Key Driver

A significant portion of Australia’s population growth is driven by net overseas migration (NOM). This trend peaked at 537,000 in 2022-23 but is expected to stabilize at 225,000 annually over the next few years. This influx of international arrivals, combined with a fertility rate that will stabilize at 1.62 births per woman by 2031-32, will heavily influence the growth of Australia’s largest cities.

Australia’s Capital Cities Set to Dominate Growth

The big city boom is set to continue with Sydney, Melbourne, and Brisbane at the forefront of Australia’s urbanization. The Treasury forecast shows that these cities will grow significantly faster than regional areas, increasing pressures on housing and public services.

Sydney and Melbourne: Rivalry Continues

Despite hopes in Melbourne to eventually surpass Sydney in population size, Sydney is projected to remain the largest city for the foreseeable future. The Greater Sydney area is expected to grow from 5.6 million in 2023-24 to 6.5 million over the next decade, keeping it firmly ahead of Melbourne, which will expand to 5.4 million from 6.4 million.

This change is a setback for Melburnians hoping to see their city overtake Sydney. Treasury’s forecast has dashed the belief that Melbourne could catch up with Sydney within the next decade.

Brisbane: A Growing Powerhouse

Meanwhile, Greater Brisbane will experience significant growth, rising from 2.8 million to 3.3 million in just ten years. By 2025-26, Brisbane will house more than half of Queensland’s population, marking a milestone not seen since 1978.

Perth will also see steady growth, with its population rising from 2.4 million to 2.9 million in the next decade, while Adelaide will grow modestly from 1.5 million to 1.6 million.

Hobart and Darwin: Smaller Cities, Growing Populations

Even smaller cities like Hobart and Darwin will see population increases, driven largely by international migration. Greater Hobart is expected to grow from 254,000 today to 270,000 by 2034-35, accounting for 44% of Tasmania’s population. Similarly, Darwin will see a modest increase to 175,000 residents by 2034-35, up from 152,000 today.

Infrastructure and Housing Challenges Loom

The rapid growth of Australia’s largest cities presents significant challenges, especially in terms of housing and infrastructure. The Treasury report highlights the continued strain on the country’s housing market as more people flock to the capitals.

Despite various political initiatives aimed at encouraging people to move to regional areas, the population pressure on cities like Sydney, Melbourne, and Brisbane will only increase. Housing shortages are expected to persist, and demand for services such as transportation, healthcare, and education will continue to grow.

The Changing Landscape of Australia’s States

Fastest Growth in Victoria and WA

While Sydney and Melbourne remain the country’s largest cities, Victoria and Western Australia (WA) will experience the fastest population growth rates. In contrast, Tasmania and South Australia are predicted to see the slowest growth, largely due to fewer people migrating to these states.

Treasurer Jim Chalmers has acknowledged the challenges these population trends present but assures that the government is already managing the major population shifts identified in the Treasury report.

Political Implications of Population Growth

The ongoing trend of population growth in the major cities also has political consequences. For example, Brisbane’s population growth means that Greater Brisbane will account for more than half of Queensland’s population by 2025-26, which will likely shift the political balance in the state. This concentration of voters in urban centres could influence local and federal elections.

Additionally, increased international migration and the movement of Australians to cities could intensify debates on policies related to immigration, housing affordability, and urban planning.

Government Actions to Manage Population Growth

In response to these population forecasts, the government is implementing a range of measures. One such move is a legislative workaround aimed at limiting the number of international students allowed to study in Australia. While caps were rejected by the Coalition and Greens, the government has found other ways to manage the number of students arriving in the country.

Treasurer Jim Chalmers emphasized that the government is actively working to address the challenges posed by Australia’s population trends.

What Does the Future Hold?

As Australia’s capital cities continue to grow, the country will face both opportunities and challenges. While cities like Sydney, Melbourne, and Brisbane will remain key economic and cultural hubs, the pressure on housing and infrastructure will be a major concern.

The future of Australia’s cities will depend on how well the government can manage population growth, improve infrastructure, and ensure that regional areas are not left behind in the race for prosperity. The population boom is set to continue shaping the nation’s political and economic landscape for years to come.

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