The latest analysis by KPMG Australia indicates that from 2019 to 2023, the eastern suburbs of Sydney and Melbourne experienced a reduction of roughly 2.5 percent in their prime worker-aged populations (people aged 20-64) as millennials become priced out of inner-city suburbs.
On the other hand, both Perth and Brisbane have bucked this trend with increases in working age population in inner city suburbs of 6.7 percent and 8.2 percent respectively.
The concerning rapid demographic shifts in the prime locations of Sydney and Melbourne’s eastern suburbs are putting extra strain on infrastructure works as outer suburbs accommodate the influx of residents.
"Despite being areas with exceptional access to jobs and excellent local infrastructure, inner city suburbs of Melbourne and Sydney are seeing a decline in population simply because young people can’t afford to live there,” says KPMG Urban Economist, Terry Rawnsley.
“As workers move farther from city centres, the strain on transport and local infrastructure in suburban areas intensifies, raising implications for urban planning," Rawnsley continues.
Sydney and Melbourne selected shrinking suburbs 2019-2023
| SA3 (Statistical Area) | % Change | Total Population | Under 20 | 20-64 | 65+ |
| Canada Bay | -1.3% | -1,158 | -828 | -1,540 | 1,210 |
| North Sydney – Mosman | -1.3% | -1,278 | -1,094 | -1,601 | 1,417 |
| Marrickville – Sydneham – Petersham | -1.9% | -1,064 | -943 | -163 | 42 |
| Port Phillip | -2.0% | -2,267 | -1,815 | -1,402 | 950 |
| Eastern Suburbs – South | -2.4% | -3,448 | -1,361 | -2,295 | 208 |
| Eastern Suburbs – North | -2.6% | -3,512 | -1,537 | -1,689 | -286 |
| Leichhardt | -2.7% | -1,616 | -795 | -1,332 | 511 |
| Boroondara | -2.9% | -5,126 | -2,936 | -3,568 | 1,378 |
| Stonnington – West | -3.3% | -2,289 | -1,256 | -1,002 | -31 |
The exodus of millennials in some suburbs has implications for the local economy as small businesses struggle to find young workers.
"It's no surprise that local businesses in some of these locations would struggle to attract customers and workers. A departure of 2.5 percent of your working-age population could feel like a recession," Rawnsley commented.
Boom in young workers for Brisbane and Perth
In contrast, Brisbane and Perth have emerged as beacons of relative affordability, attracting an influx of working-age people, with 6.7 percent and 8.2 percent increases in the working age population in inner city suburbs.
Brisbane & Perth selected inner city suburb population growth 2019-2023
| SA3 (Satistical Area) | % Change | Total Population | Under 20 | 20-64 | 65+ |
| Brisbane Inner – West | 4.1% | 2,548 | -420 | 2,270 | 698 |
| Brisbane Inner – East | 5.3% | 2,359 | -225 | 1,955 | 629 |
| Cottesloe – Claremont | 6.5% | 4,739 | 289 | 2,522 | 1,928 |
| Stirling | 7.5% | 15,618 | 2,696 | 8,809 | 4,113 |
| Brisbane Inner – North | 8.5% | 8,470 | -368 | 2,522 | 1,551 |
Brisbane and Perth are currently on divergent growth trajectories compared to Sydney and Melbourne. The inner suburbs of Sydney and Melbourne are losing young people, while Brisbane and Perth are gaining them.
Despite these challenges, Rawnsley stated that the inner suburbs of Sydney and Melbourne continue to offer businesses a pool of highly skilled workers. He contrasts this with Brisbane and Perth, which still have smaller labour markets but are starting to catch the eye of both national and global enterprises for potential business locations.
Against the backdrop of the millennial worker boom in the two cities, there remains a nationwide trend of consistent declines in the number of young children residing in inner city suburbs.
"This decrease reflects not only the ongoing housing affordability issue but also denotes a broader decline in birth rates over the last five years," said Terry Rawnsley.
"Families are increasingly moving to greenfield areas, where although the residential land is more available, there are significant challenges in accessing essential services and employment opportunities."
"Housing affordability is reshaping our capital cities urban fabric at a remarkable speed, presenting a myriad of challenges for families and those tasked with planning our communities' infrastructures," Rawnsley concluded.
For state based breakdowns and further info
Hayden Jewell
+61 423 868 454
hjewell@kpmg.com.au