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NSW Department of Planning, Industry and Environment
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This update looks at link between new housing and population changes. We also investigate spread of growth in NSW over the next 20 years based on the 2016 population projections.


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Population growth and housing supply in Sydney

When housing is built in an area and people move in, the population of the area changes. The links between population growth and housing supply can be difficult to understand when using large boundaries such as local government areas (LGAs). Larger boundaries can mask local variations and hide changes that happen within a boundary.

In 2011, the Australian Bureau of Statistics put in place Statistical Area 2 (SA2) geography to overcome these problems. The SA2s have an average population of about 10,000 persons and are designed to change in size if population in the area grows. They are ideal for looking at how population growth relates to property supply.

We do this by looking at total population growth over three decades, 1986-96, 1996-2006 and 2006-15. A map for each decade shows population growth using the same scale so the three maps can be compared.

Population growth

  • 1986 to 1996: A lot of population growth was concentrated in fringe locations. At the same time there were declines across Sydney’s inner west. Areas further out such as Winston Hills, show population decline due to older children leaving the family home. New supply mainly on the fringe helps to drive growth, while natural change  shape declines.



            Click map to enlarge.

  • 1996 to 2006: A similar pattern was present during this period as the previous decade but with  two differences. Growth in inner-city flats led to population growth across the SA2s within the City of Sydney LGA covering suburbs including Redfern, Erskineville and Alexandria. Increased stock growth also saw population growth west through Burwood, Homebush and Auburn. Supply of housing again played a key role in population distribution. 



            Click map to enlarge.

  • 2006 to 2015: The key feature of this decade is virtually equal growth across the city. While increasing supply is a factor, growth has occurred even in locations where housing supply is limited. Central northern Sydney and locations in the inner west with limited new supply (Kingsgrove, Canterbury and out through Belmore, Lakemba and Punchbowl) have witnessed substantial population growth. In part this is due to younger families with new babies, moving into the areas and replacing older and smaller households.



           Click map to enlarge.

What does this mean?

Over the last decade population growth across Sydney has been broadly uniform. This is a change from historical patterns, when increases in population growth were largely shaped and defined by new housing supply. This change means predicting population responses to housing supply are becoming more complex and that more nuanced strategies to providing housing supply may be needed. Housing supply strategies will continue to provide additional capacity, especially for smaller households. The population growth generated through the demographic renewal  of existing suburbs, particularly the substantial increase in households with younger children, means housing supply may not be a tool to influence population distribution in the future. With growth occurring throughout Sydney the challenge is to plan for a city that meets the population’s needs.  

Where will people live in the future? 

New population projections released by the Department of Planning and Environment show that in 20 years there will be over two million more people living in NSW than today. But this growth is not evenly spread (see the map). Those areas where most population growth is projected (coloured in darker red), centre around metropolitan Sydney and areas with regional towns and centres. 

The faster growth in Sydney is driven by a younger age profile. The biggest age groups are in their 20s and 30s, the ages when people are likely to start a family. The large number of babies likely to be born is a key driver of projected growth (see the figure below). Sydney will also grow because of continued movement of people to the city from country NSW, interstate and overseas.  


In areas outside of Sydney, growth is higher in regional centres. These centres tend to have regional hospitals and tertiary education services that act as a hub for the region, including where people live.  


Outside of Sydney a bigger proportion of the population is at the older ages. This means natural increase (the difference between births and deaths) does not drive growth. Migration plays a key role in maintaining and growing populations. This includes movement from Sydney and some moves from interstate and overseas.  

The Regional Plans we develop reflect the different patterns of population growth across NSW. They highlight local strengths and plan for the homes, jobs, services and infrastructure that regions will need over the next 20 years. 

Our booming economy and the great lifestyle offered by Sydney and Regional NSW are reasons we're seeing the NSW population continue to grow.


Statistics released by the Australian Bureau of Statistics put the NSW population at 7.7 million people. That’s a gain of 103,241 individuals in the year to 31 March 2016, or 1.4 per cent annual growth. This growth rate is the same as the national level and only second to Victoria’s annual growth of 1.9 per cent. So almost one third of all population growth in Australia over that 12 month period was in NSW.

Estimated resident populations at 31 March 2016.
 State Population at 31 March 2016
 Change over previous year Annual growth rate (%)
 NSW  7,704,287  103,241  1.4%
 Vic  6,039,078  114,865  1.9%
 Qld  4,826,966  61,769  1.3%
SA  1,706,503  9,741  0.6%
 WA  2,613,650  29,819  1.2%
 Tas  518,478  2,202  0.4% 
 NT  244,036  960  0.4%
 ACT  395,158  4,989  1.3%
 Australia  24,051,404  327,610  1.4%

What’s behind this population increase? Net migration remains the key driver of population growth in the State (Figure 1). It is the balance of people who arrive into NSW from overseas or other parts of Australia and those who leave. In the year to 31 March 2016, 59 per cent of NSW population growth was due to net migration.  The State’s remaining population growth is due to natural increase, which is the difference between births and deaths.


A large number of people move back and forth between NSW and other parts of Australia. The long standing net result is that people leave the state  to live somewhere else. Over the last few years this net loss has been at all time low. However over the past 12 months the net interstate loss for NSW rose to 10,321 people (Figure 2). This is consistent with historic patterns, where rising home prices in NSW have affected interstate migration. House price increases in Sydney have been considerable over the past couple of years, so it is not surprising that the interstate migration loss has increased again.




Over the last 20 years NSW’s net interstate migration has largely been the reverse pattern of that for Queensland. This is because the largest number of people move between these two states. Victoria has emerged as the state with the largest population gains through interstate migration, while Western Australia experienced its biggest net loss in decades.

The loss of people from NSW to other parts of Australia is more than compensated by population gains through overseas migration. The net number of migrants has increased steadily from a gain of about 50,500 in 2011 to almost 70,800 in 2016 (Figure 3). Since the easing of the mining boom after 2012, Western Australia and Queensland have seen their net overseas migration drop so that now NSW accounts for 39 per cent of Australia’s total net overseas migration.



Planning for Sydney and Regional NSW is on track to meet the needs of a growing population.  A Plan for Growing Sydney and Regional Plans throughout the state are being implemented to meet the needs of our population.