Melbourne leads Australian population growth

Melbourne is leading population growth in Australia, as the city continues to attract domestic and international migrants.

The figures, released by the Australian Bureau of Statistics, are for the 2014-15 financial year, shining a light on the city-by-city population trends, which are a crucial factor in regional housing market performance.

Indeed, Melbourne is now the city with the fastest rising house prices in Australia, thanks to the demand for housing. It is also part of the most popular state among international expats: according to the latest FIRB report, Victoria and New South Wales (home to Sydney) led the way in foreign real estate investment. Sales of existing homes, which are only open to foreign buyers if they are looking to live in the country, were 43 per cent higher in Victoria than in New South Wales.

The ABS population figures confirm those trends, with Melbourne recording the fastest rate of population growth: 2.1 per cent. Sydney followed with growth of 1.7 per cent, ahead of Brisbane (1.6 per cent), Adelaide (0.9 per cent), Perth (1.6 per cent), Hobart (0.8 per cent), Darwin (1.9 per cent) and Canberra (1.4 per cent).

The national population was an estimated 23,777,777 in June 2015, with two-thirds of those people living in a capital city. Sydney is the most populous capital city, with 4,920,970 residents, followed by Melbourne (4,529,496). Based on that data, 20.7 per cent of Australian residents live in Sydney, followed by 19 per cent living in Melbourne – a combined total of almost 40 per cent of the total population.

“Sydney is the only capital city in which population growth over the past year has been greater than average growth over the past decade,” notes Cameron Kusher Head of Research Australia at CoreLogic. “Melbourne and Hobart recorded population growth in line with their 10 year average levels while all other capital cities have recorded below average population growth over the past year.”

Melbourne and the other cities’ growth is because “they are the strongest economies and attracting both interstate and overseas migrants,” adds Kusher, who acknowledges that affordability, as a result, is an issue, as well as the provision of infrastructure to support the growth.

CoreLogic forecasts that population growth may ripple out into the areas surrounding Sydney and Melbourne, as people look for more affordable places to live.

Victoria’s international appeal, however, may face a new headwind in the future, as rules introduced by the state’s government last month will see foreign buyers face a new surcharge of 7 per cent upon their property transactions (up from 3 per cent).

To see a full breakdown of where foreign investors are buying property in Australia, click here.