Sydney is Australia’s most populous city, so it’s no wonder we hear a lot about the number of people leaving. Aside from the coronavirus pandemic, Sydney’s exodus was largely an interstate and intrastate occurrence, meaning that those leaving Sydney mostly moved elsewhere in New South Wales or Australia. Growth in Sydney’s population is therefore largely attributed to net increases in overseas migration.
But the departure of Sydney residents for elsewhere in Australia is not a stable phenomenon. It goes through cycles. Some speculate this is due to demographic transformations—a belief which took hold during the pandemic. I’d propose a much simpler solution, which I mentioned briefly in a recent research blog article.
It just so happens that the quarterly net loss of Sydneysiders to elsewhere in Australia is highly correlated (0.863) with changes to Sydney’s median house price six months beforehand. This means you could check Sydney’s median house price and determine what will be happening among Sydneysiders six months into the future within an impressive margin of error.
It wasn’t always so easy to draw a link between the two. There was limited correlation between prices and migration in the decade to 2013. What changed was the ratio of dwelling prices to household incomes, which surpassed 8:1 the following year and hasn’t dropped below it since.
So where are Sydneysiders going?
In Q3 2020, an estimated 22,416 people departed Sydney for interstate or elsewhere in New South Wales. Since the harbour city also gained 14,634 residents from these sources, the net loss was a less alarming 7,782 residents. Usually most departing Sydneysiders head to either Melbourne or elsewhere in New South Wales. In 2020, however, Melbourne was overtaken by regional Queensland. Presumably, a large proportion of those found themselves in the Gold Coast or Sunshine Coast.
This shift is interesting, but you shouldn’t overthink it. What possible reason could there be for a reduced number of Sydneysiders migrating to Melbourne in mid-2020? The borders were shut.