Which Australian cities are growing fastest?

The Australian population continues to grow at a faster rate than anticipated. The question often asked is, ‘where are all the people going?’ Data from the Australian Bureau of Statistics (ABS) suggests that the perceived over-population of our eastern seaboard capital cities may not be far from the truth.

The ABS reported that more than 70% of the country’s population growth occurred in Melbourne, Sydney and Brisbane over the 2016-17 financial year. This growth, results in higher demand for property particularly in the regions proximate to employment and lifestyle amenity. Property price growth is essentially a function of supply and demand. The strong population growth in Melbourne and Brisbane is one of the key reasons why these markets remain our focus.

ABS has broken down the data from each city and split it into 3 categories:

  • Overseas migration
  • Internal migration – flows in and out from other regions or parts of Australia
  • Natural increase – births and deaths


The harbour city and country’s largest city currently has a population of 5.1 million, with a growth rate of 2 per cent per annum. In 2016-17 Sydney’s population increased by 102,000 people, 83% of which was overseas migration. The second highest contributor to Sydney’s growth was natural increase which saw the population grow by 35,000 people.

In terms of internal migration Sydney is well-behind with a net loss of 18,100 people. This is largely a reflection of strained housing affordability and increased living expenses.


Currently, the country’s second most populous city with 4.9 million people, Melbourne is growing at a rate of 2.7% the fastest of any Australian capital city. In the 2016-17 financial year, Melbourne experienced its highest ever net annual population increase of 125,000, 64% of which was overseas migration followed by a natural increase at 29 per cent.

From an internal migration perspective Melbourne’s population grew by 9,200 people.


Brisbane’s grew by 48,000 over the 2016-17 period with a far more even spread of the source of population growth. Overseas migration made up 38% of the total growth while natural increase and internal migration figures were 37% and 25% respectively.

Brisbane recorded an annual growth rate of 2%, its’ fastest rate of growth since 2012-13. The Brisbane market which has been criticised by the media for an apparent ‘oversupply’ is now beginning to see a shift in the balance between supply and demand. There is no doubt that supply increased in Brisbane between 2013 and 2016 due to the historically low interest rate environment, however, recently we have seen a significant reduction in the supply figures and increased levels of population growth.

The table below shows the declining building approvals in Queensland and the rising population growth figures.

QLD Net Interstate Migration QLD Net Overseas Migration QLD Building Approvals Building Approval % Change (Year on year)
2014 5,753 22,431 18,345
2015 6,417 18,917 19,555 +6%
2016 11,582 28,744 12,534 -36%
2017 15,716 27,107 (Jan – Sept – Not including the last quarter of the year which on average would add another 9,000) 9,747 -23%

Anticipating property demand is key to a successful investment strategy. Understanding the motives for population growth and where it’s occurring will ensure the property you purchase inherits strong demand in both a rental and resale sense. Of course, population growth is only one of the considerations when assessing a market, but when coupled with strong employment growth, affordability and livability we are confident that Melbourne and Brisbane represent the strongest investment opportunities in the country.

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