Australia is experiencing its fastest population growth since the 1950s, leading to increased urban density in cities and towns.
Despite being among the lowest globally, with 3.5 people per square kilometer, Australia’s population is highly urbanized, with half residing in the three largest cities. Remarkably, 75 per cent of Australians live on just 2.6 per cent of the country’s land mass.
CoreLogic research director Asia Pacific Tim Lawless said in an analysis released today that the city with the highest population density may come as a surprise.Â
“It’s not Sydney,” he said.Â
“In fact, Sydney comes in third on the population density leagues tables with 441 residents per sq. km. Melbourne (521 people per sq. km) and Adelaide (444 people per sq. km) both show an overall population density that is higher than Sydney’s.
“Sydney’s lower population density relative to Melbourne and Adelaide comes despite Sydney having a larger portion of medium to high density housing stock (units comprise 39.5 per cent of all Sydney dwellings compared with 33.4 per cent in Melbourne), and generally smaller blocks of land (the median land area for houses sold over the past year, at 569sqm was the second lowest of any capital after Perth).”
Mr Lawless said an important factor contributing to the lower population density across Sydney is the larger land area that comprises the metropolitan region.
Every capital city is recording a rise in population density, however, Mr Lawless said the way this is occurring is quite different from region to region.
“For example, Perth has recorded the largest increase in population over the past 20 years, with 54.4 per cent more residents, yet it has the highest portion of detached houses of any capital, comprising 85.5 per cent of the housing stock.
“A different example of densification can be seen in the ACT, where medium to high density housing stock has risen from a share of 25.1 per cent of all dwellings 10 years ago to 34.2 per cent in 2024, while the median block size for houses sold over the past 12 months remains among the highest of any capital at 750sqm.”
Mr Lawless said the relationship between population density and rental growth is weak.
“Population density across the unit sector provides little explanatory value about unit rental growth over the past 12 months or the past 10 years.”
The analysis showed that of the 20 highest density SA2 locations nationally (these areas represent suburbs within cities or catchments of rural towns), only two recorded a larger rise in unit rents over the past 12 months than the capital city benchmark. Both were in Sydney: Chippendale (+9.4 per cent) and Hurstville Central (+11.7 per cent).
“Over the long term, precincts with a high population density tend to show slightly stronger growth in unit rents, but softer rates of capital appreciation across the unit sector, while for houses there is hardly any relationship between population density and trends in rental or value appreciation.”