Young Australians forced outwards as inner-cities age

Paul Ryan
Paul Ryan

Deteriorating housing affordability is shifting the character of Australia's capital cities, as a smaller share of young people choose to live in inner-city suburbs.

While the profiles of cities naturally change over time due to development, prices and the desirability of different regions, analysis of Census data shows inner-ring areas have been ageing at a rapid rate, and trends are starting to effect where children live.

In 2021, there was a smaller share of young Australians aged between 19 and 35 years living within two to 10 kilometres from CBDs compared to ten years earlier.

These inner-city suburbs have traditionally been thought of as student and young-professional havens.

With a proliferation of share houses and smaller homes, well located to universities and city offices, many previous generations have started their independent housing journeys in these locations.

But that seems to be changing. Depending on the city, there are pockets of the inner-city with noticeably lower shares of younger Australians after just one decade.

Overall, there are more people of all ages living in the cities than in 2011, but the profile of different age groups has an impact on the changing character of different regions.

Cities have changed differently over the period. Apartment development in Brisbane and Melbourne CBDs has boosted the share of young Australians living in the centre of those cities.

By contrast, in Sydney the share of younger Australians living in the CBD has fallen since the early 2000s.

City of Sydney cityscape skyline - aerial view from Inner city Surry Hills suburb on a sunny day.
Fewer young people are living within close proximity of the CBDs. Picture: Getty

But a common trend is the smaller share of young Australians living in inner-city suburbs 2-8km from the CBD.

In Sydney the share living 10-16km distant has increased, with clear substitution among the young towards these further-flung locations.

In Melbourne and Brisbane, apart from CBD living, the only other regions to see an increase in the share of young are 25 km away.

Inner-city regions are ageing rapidly

Over the same period, average ages in inner-city regions have increased noticeably.

Across Sydney, Melbourne and Brisbane, average ages increased by one to two years over the decade to 2021.

In some outer suburban locations, average ages increased by even more than that.

If this ageing trend continues, it signals significant demographic change in inner-city regions.

Fewer inner-city children

With inner-city regions ageing over the decade to 2021, and a smaller share of people aged 19 to 35 living 6 to 20 km from the CBD in Melbourne and Brisbane, we are also starting to see a smaller share of children living there.

At the same time, children are starting to make up a larger share of those living 25 to 30 km from the city.

This shows that more young families are being drawn to new suburb developments on the fringes of the cities.

Affordability the likely cause

Research from the e61 Institute has highlighted the significant number of young people moving out of Sydney and Melbourne in particular.

While many things changed over the decade to 2021, housing affordability has become more challenging, particularly since the Census was last collected in 2021.

From 2011 to 2021, home prices more than doubled in Sydney and increased 80% in Melbourne. While Brisbane prices were up only 57% over that period, they subsequently increased rapidly over the pandemic period.

While housing affordability at national and state levels generally improved over the 2011 to 2021 period, these figures capture improvements from fringe and regional development over that period.

Within cities, inner-city regions saw some of the largest price increases over the decade and continued to get less affordable.

Allowing development is part of the solution

A key driver of inner-city prices has been constrained development.

Inner-cities have been severely restricted by planning and zoning limitations which have led to gentrification and pushed prices beyond the reach of many young Australians.

By contrast, where development has been allowed – in the CBDs of Melbourne and Brisbane – we have seen higher shares of young Australians. Evidence overseas shows that allowing more development reduces prices and maintains demographic diversity.

It is encouraging that reforms to planning and zoning are being considered to do the same in these historic and vibrant parts of our cities.

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