Why Sydney and Melbourne could house an additional 1.1 million people by 2027

Sydney and Melbourne could together house an additional 1.1 million people by 2027 as immigration grows faster than forecast.

Treasury budget documents predict that 1.5 million permanent and long-term residents will move abroad in the five years to June 2027.

But net overseas migration levels were higher than forecast this year, with 429,580 people moving to Australia over the year to September.

That influx of permanent and long-term arrivals is higher than the 315,000 predicted for the 2023-2024 financial year.

At the current rate, 500,000 people are likely to have moved to Australia by 2023.

Dan Tehan, the opposition immigration spokesman, said at current growth rates, 1.87 million people, up from 1.5 million, could move to Australia in the five years to 2027.

That would mean 562,049 more people in Sydney and 564,180 new overseas residents in Melbourne – a combined population of 1.12 million in Australia’s two largest cities, each of which already has a population of more than 5 million.

“Australians unable to find somewhere to live or struggling to afford multiple rent increases will be asking Labor: where will all these people live?” said Mr Tehan.

“Labor says they don’t want a great Australia, but judges them by their actions, not their words.”

The influx of international students, classified as long-term arrivals, is also driving up rental prices, with Australia experiencing an extremely tight rental vacancy rate of one percent.

Average house rent in Melbourne has risen 19 per cent in the past year to $703 per week, data from SQM Research shows.

In September, 45,090 international students arrived in Australia, an annual increase of 26.8 per cent, based on 9,540 more overseas students.

They made up the vast majority of the 55,590 people who arrived in the country in September to stay for at least a year, Australian Bureau of Statistics data showed.

During the year, Australia had 764,120 new long-term arrivals and only 291,740 long-term departures.

The net increase of 472,380 was actually higher than the net overseas migration level of 429,580 for both permanent and long-term arrivals.

A record number of 664,178 international students came to Australia in a year – an increase of 306,259 or 85.6 percent since Labor was elected in May 2022.

AMP deputy chief economist Diana Mousina said the government could cut the number of international students to ease pressure on inflation, even as the Treasury predicts net foreign migration will slow to 260,000 in 2024-2025.

‘While it is unlikely that the same rate of population growth will repeat itself in coming years, the challenging inflation environment and decline in Australian living standards due to negative per capita GDP growth means there is reason for the government to to assess temporary visa intake. ,’ she said.

Dan Tehan, the opposition immigration spokesman, said that at the current rate, 1.87 million people, up from 1.5 million, could move to Australia in the five years to 2027.

AMP deputy chief economist Diana Mousina said the government could reduce the number of international students to ease pressure on inflation (pictured is the University of New South Wales in Sydney)

While Australia is not technically in a recession, it is suffering from a per capita recession, with gross domestic product contracting in both the March and June quarters.

Productivity levels also fell by 3.6 percent in the last financial year.

The Australian Bureau of Statistics has released new forecasts predicting the national population will grow from 26.5 million in 2023 to between 34.3 million and 45.9 million people in 2071.

However, government agencies do not have a good track record of predicting population growth, with the Treasury predicting in 2022 that Australia’s population would reach the 25 million milestone by 2042 – which occurred in 2018.