Exodus from Melbourne to the regions during the pandemic

How will the COVID-19 pandemic and the rise of working from home affect where people choose to live? Does everyone want a treechange? Have people been moving out of Melbourne during lockdown? The ABS has released provisional migration data for the June 2020 quarter, the first major data release that helps us answer these questions. Resident demographic expert Glenn Capuano digs in to the story the figures are telling.

Need help understanding how COVID-19 is affecting your local communities?

There has been a lot of interest since the start of the COVID-19 pandemic in the work from home revolution, and whether it will continue. The big question, supported with only anecdotal evidence so far, is whether people are leaving our cities to move to places outside commuting distance and working from home.

As part of a series of more timely publications to look at the effects of COVID-19 on Australia’s population and economy, the ABS has started temporarily releasing interstate and capital city/rest of state migration numbers on a quarterly basis. (These are normally published annually, alongside the Estimated Resident Population each March, for the previous year ended June.) Preliminary numbers came out this week – and they paint an interesting picture.

How is population shifting across the states?

For the June quarter 2020, both New South Wales and Victoria lost population to other states due to migration.

For NSW, this is nothing new. NSW always loses population interstate, usually to Queensland. And this year is no exception – they lost 4,000 to Queensland. The big change is to Victoria, which lost just over 3,000 people interstate in net terms (ie. 3,000 more people moved out than moved in) for the June 2020 quarter. 800 of this loss was to NSW – the first time since 1997 that NSW has recorded a net movement in from Victoria.

Victoria’s interstate migration has been strongly positive for about 10 years now, with a strong economy and large housing growth on the fringe of Melbourne. This is the first quarter of net migration loss which Victoria has recorded since 2008, so it’s pretty significant. It’s also worth mentioning that the June 2020 quarter covers the first lockdown, but ends before the second lockdown, which was much harsher and longer lasting – so we would expect migration out of Victoria to accelerate when the next quarter’s figures are released. (Though interstate borders have been closed, it’s still possible to move if you’re migrating permanently. Overall the number of people who moved interstate was down about 15% from the previous year, but there are still plenty of movers.)

Here are the net figures for the June 2020 quarter compared to the June 2019 quarter for all states and territories (more details on the ABS website here). Another standout is Queensland, which is the beneficiary of a lot of migration from NSW and Victoria, running now at close to 30,000 per annum net in-migration. Queensland has long been a recipient of migrants from further south but this seems to be accelerating again. Also, Western Australia has almost stemmed its post-mining boom migration losses.

These figures are calculated using Medicare change of address records, for 3 months after the reference period. More information on how this is done can be found here.

What’s happening with capital cities like Melbourne?

The publication also looks at migration between capital cities and other areas. This is where it gets interesting. For many years, migration from our capital cities to regional areas has been a trend. If you group capital cities together, there is generally a migration outwards from these areas, as people seek the tree-change, sea-change etc. But this has mainly been driven by Sydney, which contributes a lot of population to regional NSW, as I’ve written about before.

In the June 2020 quarter, there was a net loss of 10,484 people from capital cities to regional Australia. While Sydney lost around 6,000 people by this method in the quarter, Melbourne went from slightly positive migration in the June 2019 quarter to a loss of almost 8,000.

In other words, Sydney continues to contribute population in net terms to Regional NSW, but Melbourne has turned from positive to negative migration very quickly. This is a quarterly figure, so if extrapolated out to a year we could be talking about a net loss of 32,000 people for Melbourne per annum. Since there is no overseas migration to speak of at the moment, it’s likely that Greater Melbourne’s population is now declining (supported only by natural increase, which is not shown in this release but in 2019 was around 25,000 p.a. for Melbourne).

This is a far cry from when we were talking about Melbourne potentially overtaking Sydney to become Australia’s largest city.

Regional Victoria is the major beneficiary of Melbourne’s population exodus, with almost 12,000 Melburnians moving there in the quarter and only 6,000 moving the other way. This is far greater than the trend from just a year ago. Melbourne is also contributing population in smaller numbers to Sydney, Regional NSW and Regional Queensland (not so much to Sydney or Brisbane, so this is likely to be seachange/lifestyle moves). Migration with other states and cities are very even (similar and smaller arrival and departure numbers).

It’s worth mentioning that “Greater Melbourne” as shown here is the ABS statistical boundary, not the lockdown boundary used by the Victorian Government which we’ve all become so familiar with over the past few months. Places like Bacchus Marsh, Gisborne, Wallan and Kinglake, which many people do move to for a treechange, are included in Greater Melbourne for these purposes, and so migration from the suburbs to these areas doesn’t count as migration to Regional Victoria. For more information on the boundary difference, see this article.

So where does this leave us?

This is a profound shift in Australia’s population landscape. In the Victorian context – given that the dataset relates to the quarter before the second lockdown – it seems likely to accelerate, particularly given that Melbourne’s lockdown was much more severe than in Regional Victoria.

At this point we don’t know where in Regional Victoria the population is going; those numbers won’t be available until the main ERP release in March next year. But there is a clear trend. The combination of coronavirus restrictions and the shift to working from home is driving a move out of our cities and into regional areas, particularly from Melbourne, while the established similar trend in Sydney also continues.

.id will update all the population numbers on our Community Profile sites as soon as the data are available. This new release doesn’t contain any local-level data, but you can access the latest population numbers as well as JobSeeker recipients for your area updated monthly.