"Facing a Demographic Shift: How Immigration and Declining Birth Rates Shape Our Future at 31.3 Million"

Hobart's population is projected to rise to 270,000 within the next ten years, adding approximately 15,000 residents, primarily fueled by net overseas migration. This forecast highlights the city's growth through international newcomers.

P24 News Media

December 20, 2024

1 minute

"Facing a Demographic Shift: How Immigration and Declining Birth Rates Shape Our Future at 31.3 Million"

India

The increasing flow of immigration into Australia is significantly shaping the country's demographic landscape, providing a counterbalance to the declining birth rates and rising mortality due to COVID-19. Current projections indicate that Australia’s population could reach approximately 31.3 million by the midpoint of the next decade.

According to the federal Centre for Population, the nation is set to see an increase of around 4.1 million residents over the following ten years, with the majority expected to reside in major urban centers such as Sydney, Melbourne, Brisbane, and Perth. The forecasts reveal that by 2034, both Sydney and Melbourne could be home to about 6.5 million residents each. Sydney, which has held the title of Australia’s most populous city since the early 20th century, is anticipated to grow by approximately 900,000 residents, while Melbourne could exceed a growth of 1 million.

This population growth is closely linked to the government's strategies regarding net overseas migration. In the recent mid-year budget report, the estimated net migration was raised by 30% to 340,000, although it is predicted to decline to 255,000 by the 2025-2026 period. Nick Latimer, the executive director of the Centre, noted that despite the population forecast remaining consistent with last year's predictions, the factors driving this growth have shifted dynamically.

In the short term, the increase in net overseas migration, largely fueled by temporary migrants extending their stay in Australia, is projected to enhance population growth. However, this temporary boost is moderated by a decline in birth rates, which have dipped to an unprecedented low of 1.5 children per woman. Concurrently, an uptick in mortality rates, particularly linked to COVID-19, has contributed to a natural decrease in population growth. In the 2022-2023 period, COVID-19 was responsible for 4.1% of all recorded deaths, tapering to 2.2% in the following year.

Latimer stated that the impact of COVID-19 on mortality is expected to diminish over the next few years, with death rates anticipated to revert to pre-pandemic levels by 2028-2029. This year, the natural increase is projected to contribute approximately 104,000 to the total population. By the year 2064-2065, when Australia’s population is expected to grow to around 41.2 million, the natural increase may dwindle to just 78,000.

The reduction in births and reliance on immigration suggest that Australia’s demographic profile is aging faster than initially forecasted. In certain regions such as regional Victoria, South Australia, and Tasmania, it is anticipated that deaths will soon surpass births. The only demographic movements likely to prevent population decline in these areas are people relocating from urban regions or new arrivals from overseas.

Currently, the median age in Australia stands at 38.4 years, and projections indicate that it will reach 40 by 2034-2035. In Tasmania, the demographic profile is particularly aging, with a median age expected to reach 40 within the next few years and 46.3 by the mid-2030s. Furthermore, the old-age dependency ratio, a measure comparing individuals aged over 65 to the working-age population, is forecast to climb from 26.8 to 30.8.

Treasurer Jim Chalmers emphasized that the aging population will pose ongoing challenges for the nation’s financial and social structures. By 2064-2065, nearly 25% of the population is projected to be aged 65 or older, creating substantial fiscal and policy dilemmas.

The data further indicates that the growth rate of the capital cities will significantly outpace that of rural and regional regions. By 2023-2025, Sydney is expected to house 67% of New South Wales’ residents, while the proportion of Victorians residing in Melbourne is predicted to increase from 77% to 78.4%. The share of Australians living in non-metropolitan areas is expected to continue its downward trend over the next ten years.

Western Australia, known for its low population density, will maintain the highest percentage of urban residents, with expectations of rising from 80.6% this year to 82% by 2034-2035. Furthermore, Brisbane is projected to surpass the halfway mark of Queensland’s population for the first time since 1978 by 2025-2026.

Western Australia and Victoria are likely to experience the highest population growth rates, while Tasmania and South Australia may lag behind. Interestingly, Melbourne, which had been on track to surpass Sydney as the most populous city by 2031, is now likely to remain in second place until at least the latter half of the 2030s, mainly due to shifting migration patterns favoring New South Wales.

In contrast, Hobart's population is expected to grow modestly by 15,000 over the next decade, reaching a total of 270,000, with net overseas migration being the primary driver. Meanwhile, Canberra is forecasted to expand by 61,000 residents, bringing its population to approximately 541,000 by 2034-2035, thanks to a combination of natural growth and migration.