Major Australian city lost 100,000 people in one year

3 weeks ago 10

Aerial view of the Sydney CBD: long-time residents have been departing Sydney in droves.

Rampant housing costs have been hollowing out Sydney as families flee to cheaper cities – with only high overseas migration intake preventing the Harbour City from shrinking, a new study shows.

The analysis of ABS figures revealed Australians who grew up in Sydney are packing their bags in unprecedented numbers, while natural births and migration from other parts of Australia are falling.

It’s led to huge net internal migration loss and Sydney is now the only major capital that would be getting smaller without overseas migration to prop it up.

Sydney’s median house price last month hit $1.62m and is just under $500,000 pricier than Australia’s next most expensive capital, Brisbane, and about $600,000 more than in Melbourne.

The demographic analysis by Primara and finance group Our Top 10 showed 104,231 Sydneysiders fled the city in FY24 — equivalent to 2 per cent of the city’s population.

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Parramatta South had the biggest net internal migration outflow.

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This was far higher than the 63,145 people estimated to have moved into Sydney from other parts of the country. The result was a net internal migration fall of 41,086.

Net overseas migration added 120,886 people, keeping overall Sydney population growth positive at 79,800.

Without overseas arrivals, the Harbour City’s population would have dropped by 0.3 per cent, the study showed.

Experts explained the trend was mostly driven by the housing market as Sydney continues to have one of the country’s best economies and many of Australia’s highest paying jobs.

It also consistently rates as one of the world’s best cities for lifestyle when factoring in public transport, household wealth, greenery, climate and financial opportunities.

Our Top 10 chief executive Simon Ma said people leaving Sydney was not a “lifestyle choice”.

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High home prices have encouraged waves of people to leave Sydney for other areas – often southeast Queensland. Picture: Jeremy Piper

“(It’s) economic displacement driven by property prices that average Australians simply cannot afford,” he said.

“The trend positions Sydney as Australia’s unaffordability capital, requiring constant overseas migration to mask its domestic population decline.”

REA Group economist Angus Moore said Sydney had been more expensive than other capitals for decades but housing shortages and ailing construction levels have widened the gap.

Overseas migration has coincided with these shortages to put further strain on prices and rents, he said.

“Young families are frequently leaving for more affordable markets. Despite this headwind, the Sydney (population) is still growing because it attracts high overseas migration,” Mr Moore said.

“Housing supply has not matched population growth. Sydney needs more housing and that’s put pressure on prices over many years.”

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Sydney’s median unit price is approaching $900,000 – close to the median price of houses in many other capitals.

Parramatta has been the epicentre of the city’s resident drain, topping the list of internal migration losses with negative net internal migration of 7.6 per cent over the 2024 financial year.

There was a similar loss in nearby Rosehill-Harris Park, along with inner city areas Chippendale and Camperdown-Darlinghurst.

“Parramatta’s low net internal migration reflects a distinct lifecycle pattern driven by housing affordability and dwelling types,” Mr Ma said.

“Despite topping the list for negative net internal migration, Parramatta South still saw population growth thanks to net overseas migration equivalent to 10.4 per cent of the population,” Ma said.

Parramatta North saw similar extremes — 8.5 per cent growth from overseas migration but a net internal migration loss of 2.7 per cent.

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Mr Ma said the result was a “revolving door” population: newcomers arrive, get started in life, and then bolt for more affordable areas.

Queensland has been the most popular destination for departing Sydneysiders, hoovering up 30,000 residents via internal migration as families swapped Sydney mortgages for cheaper coastal living.

Regional NSW also chalked up a net internal migration gain of 10,000, expanding with minimal overseas arrivals.