Major Australian city lost 100,000 people in one year – realestate.com.au

Aerial view of the Sydney CBD: Longtime residents are leaving Sydney in droves.

High housing costs have hollowed out Sydney as families flee to cheaper cities – with only high overseas migration inflows preventing the Harbor City from shrinking, a new study has found.

The analysis of ABS figures shows 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 has led to a huge net internal migration loss and Sydney is now the only major capital that would shrink without overseas migration to support this.

The average house price in Sydney last month was $1.62 million and is just under $500,000 more expensive than Australia’s second most expensive capital, Brisbane, and about $600,000 more than Melbourne.

The demographic analysis by Primara and financial group Our Top 10 found that 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 largest net internal migration outflow.

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

Net overseas migration added 120,886 people, leaving Sydney’s total population growth positive at 79,800.

Without overseas arrivals, the port city’s population would have fallen by 0.3 percent, the study found.

Experts explained that the trend was mainly driven by the housing market, as Sydney continues to have one of the best economies in the country and many of the highest paying jobs in Australia.

It is also consistently rated as one of the world’s best cities for lifestyle when we take into account public transport, household wealth, green space, climate and financial capabilities.

Our top 10 CEO Simon Ma said people leaving Sydney was not a “lifestyle choice”.

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High house prices have driven large numbers of people to leave Sydney and move to other areas – often to south-east Queensland. Photo: Jeremy Piper

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

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

Economist Angus Moore of the REA group said Sydney has been more expensive than other capital cities for decades, but housing shortages and poor construction levels have widened the gap.

Overseas migration has coincided with these shortages, putting further pressure on prices and rents, he said.

“Young families are often moving to more affordable markets. Despite these headwinds, Sydney’s population is still growing as it attracts large overseas migration,” Moore said.

“Housing supply has not kept pace with population growth. Sydney needs more housing and that has been putting pressure on prices for years.”

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The average unit price in Sydney is approaching $900,000 – close to the average price of houses in many other capital cities.

Parramatta has been the epicenter of the city’s population drain and tops the list of internal migration losses with a negative net internal migration of 7.6 percent over the 2024 financial year.

“Parramatta’s low net internal migration reflects a clear life cycle pattern driven by housing affordability and housing 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 percent growth through overseas migration, but a net internal migration loss of 2.7 percent.

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Mr Ma said the result was a “revolving door population” with newcomers arriving, getting started in life and then fleeing to more affordable areas.

Queensland is the most popular destination for outgoing Sydneysiders, with 30,000 residents having been sucked in through internal migration as families swapped mortgages in Sydney for cheaper living on the coast.

Regional NSW also recorded a net internal migration gain of 10,000, growing with minimal overseas arrivals.