An insight into Australian cities

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As property investors, it pays to know how cities and the many pockets that comprise them are changing and growing over time. Given the success of housing markets is driven by demand, it pays to know your customer base.


Each year, the Federal Government takes the temperature of our major cities and prepares a report card examining population, productivity, governance, waste, energy consumption and liveability.

The fourth such State of Australian Cities report has been released for this year and provides an interesting overview of how our major metropolitan locations are changing and what potentially lies ahead.

What’s clear from the wealth of data available is that Australia has one of the highest population growth rates in the OECD (Organisation for Economic Cooperation and Development) group of countries. Furthermore, given the average growth of major cities is above the national average, it appears most Australian cities have some of the highest growth rates in the developed world.

In 2012, larger capitals grew almost 50 per cent faster than the rest of the country. The State of Australian Cities report found that Canberra, Darwin, Perth and to a lesser extent Brisbane are attracting higher numbers of mainly male 15 to 24-year-olds.

Sydney is actually losing significant numbers of residents across all age groups, but overseas migrants are taking their place, the report found. That keeps the New South Wales population growing.

The differences aside, every major city continues to attract a new crop of residents that need to live somewhere. Where and how will differ on the person, location and whether they’re renting or buying.

The bulk of Australia’s overall population growth is mainly due to international migration, and specifically, two streams of it. The first is skilled migrants who live mostly in or near city centres and the second is citizen migrants who tend to reside at a distance from CBDs.

Another interesting trend highlighted in the report is in the growth of knowledge-intensive jobs in major cities over recent years. These high-skilled jobs require significant expertise, intellectual ability and a degree of innovation.

In major cities, home renters tend to live near the centre while homeowners are more common in middle and outer suburbs.

While car usage is highest in major cities, it’s lower-income Australians who tend to drive to and from work. Those people with higher incomes will gravitate towards public transport services, the report found.

Every major city contributes in some unique way to the national economy. Perhaps unsurprisingly, the report found that the manufacturing and retail sectors are now employing a smaller proportion of Australians in major cities.

As cities continue to grow at a rapid pace, the challenge for government is to adequately plan for expansion and deliver the required infrastructure and services.

There remain numerous shortfalls in connecting work and homes in major cities and there are numerous avenues for improvement, according to the report. It identifies three strategies. “Firstly, by bringing workplaces closer to homes; secondly, by increasing the number of dwellings in areas that have the greatest number of jobs so that people can live close to work; and thirdly, by improving transport links between work and home.”

On the face of it though, Australian cities are fairly liveable. From a global standing, Melbourne consistently ranks highly on prosperity and quality of life. In a 2012 ranking by the Australian Property Council of 11 of Australia’s major cities, Adelaide came in at number one.

The median incomes of Australian households has risen sharply over the past decade. As the report points out, growth was particularly strong for those people at the top and bottom end of the scale. In eastern capitals like Melbourne, those who’ve experienced the biggest rises in their income tend to live near inner suburbs. Conversely, in Perth they were spread widely across the capital.

In the largest cities, unemployment is typically greater the further you get from the CBD. There’s also a decrease in skill levels with distance, the report found.

Again reflecting the shift of people, cities are increasingly “stratified by age as well as income, skills and employment,” the report found. There has been a big push outwards among people aged over 65 in the 10 years to 2011.

And the final tidbit to note – while rates of cycling and walking fell through the 1990s, they began to increase again in the noughties. Now, the proportion of trips to work made by bicycle is the highest it has been in 40 years.

To recap:

  • Australia’s population continues to grow at a very high rate. Each major city is experiencing a growth to its resident base.
  • Some cities are attracting a younger cohort. Across the board, major cities are younger, richer and better skilled, while older Australians are moving further out.
  • Migrants who come here for work for a period of time tend to live near the CBD while new citizens will settle on the outskirts of cities.
  • People who live in or close to the city centre are generally renters while homeowners are in middle and outer suburbs.
  • The growth of knowledge-intensive jobs in major cities has accelerated.
  • Unemployment tends to rise the further you get from a city, as does skillset.


Shannon Molloy is the deputy editor of Australian Property Investor magazine,