Australia's regional cities - which ones are growing?

High levels of population growth, particularly through overseas migration, have well and truly put the spotlight on population issues.  But population growth is uneven, and many of the problems are seen through the lens of people stuck in traffic jams in Sydney and Melbourne.  The new Australian Prime Minister, Scott Morrison, has flagged the potential for policies whereby new migrants are required to live in regional areas.  There have also been calls for greater incentives to encourage people and jobs to decentralise, especially to our regional cities.  This blog looks at recent growth trends in Australia's regional cities and considers the issue of whether or not they can alleviate growth pressures in our major cities by increasing their own population growth.


What are Australia's largest regional cities?

In this blog, a regional city is defined as Significant Urban Areas (SUA) that are not state capitals.  Using this definition, the largest regional city in Australia is Gold Coast - Tweed Heads, with a 2017 population of 662,700.  Five of Australia's largest regional cities are located in Queensland, reflecting the more dispersed settlement pattern of that state.  The ten largest regional cities in Australia are shown in the table below.

The table also shows that these largest regional cities have modest to strong population growth.  Geelong, located south west of Melbourne, recorded the strongest growth rate in 2016-17 (2.7%), which represented growth of over 6,900 persons.  Gold Coast - Tweed Heads and Sunshine Coast, located south and north of Brisbane respectively, also grew strongly (2.6%).  Of the largest regional cities in Australia, the slowest growth was recorded in Central Coast, to the north of Sydney (0.8%).

Which regional cities are growing?

Most regional cities in Australia recorded growth in 2016-17, but those with the strongest growth rates were generally located within the economic catchments of the state capitals.  The table below shows the regional cities with the strongest growth rates in 2016-17.  All of these are growing at rates above the national average of 1.7%.  Notably, six of these are located in Victoria, primarily in the peri-urban area beyond the Melbourne metropolitan fringe.  The growth of these peri-urban centres reflects a general desire to live within the economic catchment of the state capital, while at the same time taking advantage of relatively affordable housing and a semi-rural lifestyle.

  

One of the quirks of the SUA geography is that non-contiguous urban areas that are on the fringe of metropolitan areas, can be included in the structure.  Hence the fastest growing regional city is the outer northern Perth suburb of Yanchep.  Although it has a small population, its growth rate was 7.1% in 2016-17.  Yanchep and the neighbouring suburb of Two Rocks is one of the major greenfield growth fronts on Perth's northern fringe and are forecast to grow rapidly over the coming decades.  Similarly, Melton is a major growth area on Melbourne's western fringe, recording growth of 5.4% in 2016-17.  Warragul - Drouin, east of Melbourne, is the fastest growing regional city not within a metropolitan area, recording growth of 3.3% in 2016-17.

Regional cities in decline

More than twenty regional cities recorded population decline in 2016-17.  Mount Isa, in outback Queensland, recorded a decline of 2.2%, followed by Whyalla in South Australia (-2.0%) and Broken Hill in outback NSW (-1.8%).  All these cities have a history of population change which is strongly linked to the ebbs and flows of the mining industry and other economic conditions.  Mount Isa's population was growing modestly until 2013, but has declined by over 10% since that time.  Whyalla's fortunes are tied to its steelworks and shipbuilding heritage.  The population was relatively stable for many years, but has declined since 2014.  This blog details the economic and social fortunes of the town over the decades, from the boom of the 1960s to the declining years, which started in the 1970s.  More recent investment in the Whyalla steelworks and renewable energy projects should revive the city's fortunes.

Can additional growth in regional cities relieve population pressures in our largest cities?

As mentioned above, Prime Minister Scott Morrison has flagged the potential for encouraging migrants to settle in regional areas of Australia, but what impact are they likely to have on the overall numbers?  The issues with rapid population growth are more complex than simply redistributing people by way of incentives.  Despite good data on numbers, the reasons why people move are still poorly understood.  Furthermore, why concentrate solely on overseas migrants?  Populations also grow and change through internal migration (people moving within Australia) and natural increase (births minus deaths).  

In the globalised economy of the 21st century, more and more people are living outside their country of births and overall people are becoming increasingly mobile.  Australia's permanent migrants are far out numbered by temporary migrants (particularly overseas students).  The volatility of migration, and the rapidity with which people respond to changing economic conditions, was highlighted by the end of the mining boom.  Only a few years ago the population of Western Australia was growing rapidly but with the end of the boom net overseas migration has declined, more people are moving out of the state than in, and there have been flow on effects in the housing market.

The latest population data confirms that many of Australia's regional cities are growing strongly, so can they take the pressure off Sydney and Melbourne?  The answer lies in the numbers.  Melbourne grew by more than 120,000 people in 2016-17.  This compares with growth of just under 7,000 in Geelong, the second largest city in the State.  The combined growth of Geelong, Ballarat and Bendigo in 2016-17 was 10,350 - less than 10% of Melbourne's growth.  Even if the volume of growth doubled at the expense of Melbourne, it would make a small dent the overall number, but place additional pressure on local councils in regional cities to service the sudden increase in growth eg residential land supply and infrastructure provision.

The reality is, that even with decentralisation policies to encourage growth in the regions, Sydney and Melbourne will continue to grow, and this growth needs to be planned for.  Furthermore, even with population growth of zero, problems of congestion and housing affordability will not magically disappear.  Planning for population growth is multi-faceted, and knee jerk solutions are not the silver bullet.  

Summary

Population growth woes are generally seen through the lens of Sydney and Melbourne, but many regional cities are growing strongly.  Gold Coast - Tweed Heads is the largest regional city (using the SUA classification), with a 2017 population of 662,700 and growth rate of 2.6%.  The fastest growing regional cities were actually outer suburbs of major cities, but not contiguous with the urban area.  Yanchep was the fastest growing regional city in 2016-17 (7.1%) despite being part of the greater Perth metropolitan area.  Despite the strong growth in some regional cities, it's not realistic to assume that more rapid growth would alleviate growth pressures in Sydney and Melbourne.