Severely Unaffordable Housing and Traffic Driving Households from Sydney


Recent stories have detailed the strong net domestic migration out of Sydney, Australia's largest city (metropolitan area). A well covered report by economist Callam Pickering has noted strong interest by STEM workers (science, technology, engineering and mathematics) workers in leaving the area (see here and here). Pickering cites high housing costs as a cause, while social researcher Mark McCrindle agrees and notes that "Sydney has the longest capital city commuting times in Australia." Both are right. Sydney has the second worst housing affordability among the 92 major metropolitan areas in nine nations covered by the 13th Annual Demographia International Housing Affordability Survey. Only Hong Kong has housing affordability more severe. Moreover, Sydney's traffic congestion is so bad that its average work trip commuting time is greater than that of traffic clogged Los Angeles, as well as 51 of the other 52 metropolitan areas over 1,000,000 population in the United States.

The out-migration from Sydney is not new, having led Australia in that category for at least a decade. This article examines net domestic migration over the past 10 years in Australia.

Net Domestic Migration among the States and Territories

As goes Sydney, so goes New South Wales. New South Wales experienced by far the greatest net loss, at 146,000, according to the annual reports of the Australian Bureau of Statistics from 2006-2007 to 2016-2016. However, outside Sydney, New South Wales experienced a net domestic migration gain of 54,000, which was widely distributed beyond Sydney (Greater Capital City Statistical Area, or GCCSA), including just west of the Blue Mountains and along the Pacific Coast (Figure 1).

Queensland continues to see the largest net domestic migration gain among the states and territories of Australia. Over the past ten years, 114,000 more people have moved to Queensland than from other parts of the country. This has been driven by the two large resort and retirement centers of the Gold Coast and Sunshine Coast as well as Brisbane, Australia's third largest metropolitan area. Outside these three areas, the state gained 13,000 net domestic migrants.

Victoria, the second largest state in population is also the second largest attractor of net domestic migration. Victoria gained 47,000 net domestic migrants over the last ten years. Nearly all of the net domestic migration gains have been to areas outside Melbourne, the nation's second largest metropolitan area. Other areas of the state of Victoria, such as Geelong, Ballarat, and Bendigo, had strong gains, and all were greater than that of much larger Melbourne, both in actual numbers and population relative terms.

Western Australia gained 36,000 net domestic migrants, all of which and more went to the Perth metropolitan area. Net domestic migration outside Perth was a minus 6,000. The Australian Capital Territory, home of the commonwealth (federal) capital of Canberra gained 2,000 net domestic migrants.

The other states and territories lost net domestic migrants. Tasmania, the island state, lost 4,000 net domestic migrants, while the state capital, Hobart gained 1,000. The Northern Territory lost 12,000 net domestic migrants, 11,000 of which were outside the capital, Darwin. South Australia lost 37,000 net domestic migrants, with 36,000 of the loss occurring in the capital, Adelaide.

Large Metropolitan Areas and Local Domestic Migration

Australia has long been dominated by its few (five) large capital city metropolitan areas, Sydney, Melbourne, Brisbane, Perth and Adelaide. These are the only metropolitan areas with more than one million residents. Yet, trends over the past decade have indicated a flow of domestic migrants (residents who move from one area within the nation to another) to outside the large capital cities. Totaling up annual reports of the Australian Bureau of Statistics, the national statistical agency shows that 163,000 residents moved away from the larger cities to other parts of the country between 2006-2007 and 2015-16.

The Large Capital Cities

Net domestic migration losses have been dominated by a large outflow from Sydney. Sydney's loss of 200,000 net domestic migrants is equal to 4.1 percent of the Sydney GCCSA population according to the 2016 census (4.8 million). Adelaide, capital of South Australia, lost 36,000 residents to other areas. This is not as high a percentage as in Sydney, at 2.8 percent of Adelaide's 2016 GCCSA population (1.3 million). Melbourne, the capital of Victoria, which is nearly as large as Sydney (4.5 million), gained a nominal 3,000 net domestic migrants.

Two of the large capital cities gained. Perth, the capital of Western Australia, added the most net domestic migrants, with a 42,000 gain. This was 2.2 percent of its 2016 Perth's GCCSA population (1.9 million). Brisbane, capital of Queensland, added 28,000 residents, or 1.1 percent of its 2016 GCCSA population (2.4 million).

The Rest of Australia

Altogether, the two large, principally retirement areas garnered nearly one-half of the domestic migrants lost by the large capital cities.

The Gold Coast, just south of Brisbane (80 kilometers or 50 miles) had the largest net domestic migration gain in the nation, at 45,000. This is equal to 6.8 percent of the population recorded in 2016. The Gold Coast is largely in Queensland, but a part, Tweed Heads, is located just across the state border in New South Wales.

The Sunshine Coast, which is 65 miles (105 kilometers) north of Brisbane, gained 38,000 net domestic migrants. This is equal to 13.3 percent of the 2016 population, and the largest net domestic migration percentage gain among the largest metropolitan areas.

Outside of these areas, the rest of Australia gained 79,000 net domestic migrants (Figure 2).

The Future?

The domestic migration patterns, however, do not indicate a mass migration to the outback across the whole of the nation. Outside the capital cities, there is substantial domestic out-migration from Western Australia, Tasmania and the Northern Territory. Yet, there is strong domestic migration outside the capital cities of Queensland, Victoria, and New South Wales. The large capital city migration losses are in just two of the largest capital cities, Adelaide, and Sydney, the largest and dominant exporter of people.

Meanwhile, The Daily Telegraph reports a poll showing that one-in-three Sydneysiders is considering leaving in the next five years. This includes more than one-half of renters, who have found moving up to home ownership especially difficult due to Sydney's severely unaffordable housing. It also includes more than one-half of 18 to 25 year olds. This is not terribly surprising. Stuck in traffic, or on crowded rail trips to the central business districts (CBDs), there is plenty of time to contemplate a better life with less expensive housing that an increasingly digital age is likely to make available.

Wendell Cox is principal of Demographia, an international public policy and demographics firm. He is a Senior Fellow of the Center for Opportunity Urbanism (US), Senior Fellow for Housing Affordability and Municipal Policy for the Frontier Centre for Public Policy (Canada), and a member of the Board of Advisors of the Center for Demographics and Policy at Chapman University (California). He is co-author of the "Demographia International Housing Affordability Survey" and author of "Demographia World Urban Areas" and "War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life." He was appointed to three terms on the Los Angeles County Transportation Commission, where he served with the leading city and county leadership as the only non-elected member. He served as a visiting professor at the Conservatoire National des Arts et Metiers, a national university in Paris.

Photograph: Surfer's Paradise (Gold Coast), Queensland by author.