Melbourne to become Australia’s most populous city by 2033 amid Sydney exodus

With tens of thousands of people set to leave Sydney, government forecasts show a major population shift will make another city Australia’s biggest. Find out which one.

An exodus of residents and lower international migration means Sydney will be overtaken by Melbourne as Australia’s biggest city within a decade, but NSW will remain the most populous state in the nation.

Greater Sydney is expected to be home to 6.06 million people by 2032-33 as overseas migration increases and travel restrictions ease after years of disruption caused by the Covid-19 pandemic, but will still lose its status as the largest city according to forecasts by the federal government’s Centre for Population.

More than 30,000 people are expected to leave Sydney in 2032 – almost three times as many as are forecast to leave Melbourne – while international migrants are also going to favour the Victorian capital, helping it to reach a population of 6.1m within a decade.

Despite being hit hard during the pandemic with no population growth at all in 2020-21, NSW will remain the biggest state over the next ten years.

Treasurer Jim Chalmers said “crippling skills and labour shortages” were holding NSW businesses and the economy back as it recovered from the worst of the Covid-19 pandemic.

6.06 million people are expected to call Greater Sydney home by 2033. Picture: NCA NewsWire / Damian Shaw

“These pressures have compounded a decade of migration policy chaos and under-investment in skills and training by the Liberals and Nationals,” he said.

But Mr Chalmers warned while migration was “part of the solution” to dealing with workforce shortages in Sydney and across the state, it was “not the only answer”.

Treasurer Jim Chalmers said increasing skilled migration “is not the only answer” to workforce shortages. Picture: Liam Kidston

“Our approach addresses workforce shortages in a number of ways – making it easier for parents to work more if they want to, training more Australians for skills shortages which have been building for a decade, and improving our migration program, which is the focus of the migration review being led by Home Affairs Minister Clare O’Neil,” he said.

Mr Chalmers said a healthy and growing population was “vital” to create a stronger and more prosperous economy.

He said Covid-19 highlighted the importance of workforce wellbeing to Australia’s economic prosperity.

“While the pandemic had significant, enduring impacts on our community and our economy, it’s clear now that our population growth is bouncing back,” he said.

Melbourne will by 2033 be Australia’s most populous city. Picture: David Caird

Sydney’s population is expected to grow at a rate of about 1.1 per cent by 2032, significantly less than the 1.6 per cent forecast for Melbourne and also behind Brisbane on 1.3 per cent.

The population of NSW will grow to 9.1m people over the decade. Brisbane has been identified as the “sea change” capital of Australia, receiving a significant influx of internal migration since the pandemic started.

By comparison NSW has “generally experienced net outflows of interstate migration,” the government’s analysis found.

The extended Covid lockdown during the Delta wave of the virus in late 2021 prompted a “historically high” 40,000 people to leave NSW for other states.

However interstate migration is expected to return to pre-pandemic levels, which is about 22,000 people leaving the state annually, by 2023-24.