Australia has picked up a dubious new international distinction: our big capital cities lead the world for their sparse population densities and urban sprawl.

A new study by the United Nations Population Division has ranked all the world’s cities with more than 1 million people according to population density.

Our very own Perth took the crown for the lowest urban population density – it ranked 510th out of the 510 cities on the list with fewer than 2000 people per square kilometre.

Not far behind was Brisbane, with the seventh-lowest population density. (Adelaide would have given Perth a run for its money but the South Australian capital didn’t make the list of cities with over 1 million people, according to the UN’s definition – although it is credited with a population of 1.47 million people by the Australian Bureau of Statistics.)

Even Australia’s urban giants, Melbourne and Sydney, were among the 40 lowest-density cities in the world – they rated alongside Las Vegas and were even less crowded than Los Angeles, a city synonymous with urban sprawl.

At the other end of the table, India’s “maximum city” – Mumbai – was ranked the world’s most densely populated city, with 27,000 people per square kilometre. That’s 14 times the density in Perth.

London came in at 297th for population density (with 6328 people per square kilometre) while New York City was 378th (5173 per square kilometre). Australia’s densest city, Sydney, was way behind in 475th place (3152 per square kilometre).

Cultural factors help explain why Australian cities are so sparsely populated compared with their global peers.

Thirty of the 50 lowest-density cities were located in just five English-speaking countries – Australia, the US, the UK, Canada and New Zealand.

John Burn-Murdoch, a journalist at the UK Financial Times, has used housing data to illustrate “a deep-seated aversion to urban density in Anglophone culture that sets these countries apart from the rest”.

According to Burn-Murdoch, English-speaking nations have “a shared culture that values the privacy of one’s own home” – something that is most easily achieved in low-rise, single-family housing.

In Australia, the lure of a “quarter-acre block” remains strong even though most families that purchase a new detached house on the urban fringe now get plots half that size or less.

“The cumulative impact of centuries of such preferences is huge,” writes Burn-Murdoch.

Across the wealthy country members of the OECD, about 40 per cent of people live in apartments, but that falls to 14 per cent in Australia, 15 per cent in New Zealand and 20 per cent in the UK.

The UN’s analysis shows Australia’s capital cities are global outliers because of their ultra-low population densities. And that shines a light on our housing crisis.

Even a modest increase in urban density would deliver a substantial lift in the number of well-located homes available to aspiring buyers in our big cities.

A report by the Grattan Institute released last month estimated that if the inner 15 kilometres of Melbourne were as dense as Los Angeles – not renowned as an especially dense city – it would have 431,000 extra well-located homes. Or if the inner 15 kilometres of Sydney were as dense as Toronto – a city that often matches Australian cities on quality-of-life measures – it would have 250,000 extra well-located homes.

The sparsely populated character of Australia’s cities means relatively small-scale changes could substantially lift housing supply and therefore improve affordability.

A report released this week by the Committee for the Economic Development of Australia (CEDA), a think tank, shows that if just one in four standalone homes in Sydney, Melbourne, Brisbane, Adelaide and Perth was developed into dual occupancies, it would add close to one million new homes, increasing housing supply by 9 per cent.

CEDA advocates a “gentle” increase in density for Australia’s big cities, including a boost to dual occupancies, townhouses and low-rise apartments in well-located areas. Increased densities deliver increased housing choice and bring down housing prices, the CEDA report says.

Proposals to increase residential development are routinely framed as a downgrade, but research shows many economic benefits come with higher population density.

Grattan’s report says larger and more dense cities have higher productivity. One Australian study found that wages increase by between 1.6 and 2.7 per cent when local density doubles. Another concluded that every doubling of employment density increased wages by 1 to 4 per cent.

There is also evidence that urban density can enhance neighbourhood amenity and strengthen social fabric.

A recent report by the NSW Productivity and Equality Commission showed several cities with similar populations to Sydney and Melbourne, but higher densities – such as Vancouver, Munich and Vienna – outperformed Australian cities on quality-of-life measures.

“Quality of life does not need to be sacrificed for more density,” the commission’s report said.

There’s also evidence that higher urban densities will result in lower carbon emissions and other environmental benefits. Burn-Murdoch argues planning systems in countries like Australia often give huge weight to environmental conservation yet the preference for low-density developments “fuels car-dependent sprawl and eats up more of that cherished green and pleasant land”. He calls this the “nature paradox” of urban planning.

The vast majority of Australians agree the nation is in the grip of a housing crisis and want governments to respond to the problem, but polling shows there are divergent views about the best solutions. 

Informing voters about low population densities in Australia’s cities, and of the potential benefits that could come with higher densities, will help build political support for housing reform.

Matt Wade is a senior economics writer.

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