COVID-19’s impact on population growth: a regional renaissance as Melbourne and Sydney decline

Regional population growth

The Australian Bureau of Statistics regional population data release provides insight into the impact of COVID-19 on people’s location decisions. The estimated resident data, for the 12 months to June 2022, reflects the changing population trends observed since the onset of the pandemic.

Key points of the data release:

Population growth in Melbourne and Sydney has been impacted by:

  • the hiatus in international migration
  • lockdowns pausing the long-term trend of people moving from the regions to the cities
  • remote working making a move to a regional area more attractive.
  • Brisbane and Perth’s population grew strongly, driven by interstate migration
  • Regional areas have experience high population growth.

Population decline in Melbourne and Sydney

Melbourne’s population declined by 60,500 people (-1.2 percent) and Sydney’s population declined by 5,200 people (-0.1 percent).

There has also been a shift in the distribution of the population within each city. The Sydney Inner City Statistical Area 3 (SA3) population declined by 6,800 (-2.7 percent) and the Melbourne City SA3 population by 13,700 (-8.1 percent). This population decline was the result of a number of factors including, a high number of international students and skilled workers who left Australia and returned home overseas since 2020.

A segment of inner-city residents, particularly those working in hospitality or retail and who either lost their jobs or were in a very uncertain employment market, may have also returned interstate to their family homes. The pause in inner-city vibrancy as a result of social distancing has also influenced population growth in the inner-city during 2020-21.

An example of the changing growth pattern in a greenfield growth corridor is the Wyndham SA3 located in Melbourne’s West. Wyndham experienced population growth of 6,200 in 2020-21 compared with 12,500 in 2019-20. Despite the decline in growth rate, Wyndham has remained one of the faster growing area across Australia over the past decade.

 

Strong growth in Brisbane and Perth

Population growth in Brisbane was strong even with lower international migration. Interstate migration into Brisbane was very high during 2020-21, which contributed to population growth of 21,900 (0.9 percent). Perth also had a strong population increase of 16,200 (0.8 percent) during 2020-21. This is the result of Perth benefiting from the state border closure, which saw fewer people leaving the city during the pandemic.

Regional renaissance

Regional Australia grew by 70,900 people (0.9 percent) during 2020-21. Regional locations (based on Statistical Area 2) such as Ocean Grove – Barwon Heads (+1,300 4.1 percent), Drouin (+600 3.2 percent), Queanbeyan Region (+1,200 5.3 percent) and Caloundra – West (+2,200 7.4 percent) all had very high population growth rates. These types of regional areas attracted more people during 2021 as a result of several factors including:

  • affordable housing
  • people taking advantage of remote working
  • local employment opportunities
  • fewer young people being drawn to the cities for employment and education
  • smaller communities being more attractive during major city lockdowns
  • high local amenity.

New planning challenges

Changing population growth patterns will mean that the urban and regional planning and infrastructure provision challenges facing Australia will only become more complex. The pause in population growth in Sydney and Melbourne is expected to be temporary and will largely reverse once international migration patterns resume. Parts of the cities may even experience some immediate relief in terms of infrastructure provisioning and capacity, while simultaneously offering urban planners some much needed relief to get ahead of the immediate demand.

Despite this, the medium to longer term infrastructure challenges for Sydney and Melbourne will likely remain and will need to be addressed. Not only in terms of large-scale infrastructure but also local infrastructure which can help achieve the ‘20-minute city’ – giving residents the ability to meet most of their daily needs within a 20-minute return walk from home.

Some regional areas may experience significant infrastructure planning challenges arising from increased population growth and changing demographics. Regional Australia has an overall older age-profile when compared with the capital cities. However, with COVID-19 we are likely to experience a resurgence in the working age-population locating in regional cities. This has social planning implications in terms of the provision of kindergartens, schools, sports facilities, etc. Housing affordability for ‘local residents’ and gentrification may also become an issue in some regional communities. A good case study in these types of issues is Hobart, which has seen an influx of new residents over the past five years and rapid property price increases.

There is a need for appropriate land use planning to ensure that housing, local services, and infrastructure is sustainably provided to local communities.  New residents are likely to have heightened expectations of service delivery and infrastructure in the regions. Town planners need to consider the requirements of local communities to retain new residents and take advantage of opportunities presented by COVID-19.

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