NSW’s population likely to reach 8.5 million two years ahead of projections

This strategy seeks to achieve the right long-term migration policy settings, with particular attention given to rebalancing the migration system away from ‘permanent temporary’ visas, and helping improve alignment between migration, skills, and education policy. 

In the short-term however, the country is still experiencing the effects of the recent migration boom. The Commonwealth Government has provided a new series of estimates for net overseas migration over the next few years based on their new policy settings. Mecone has projected the likely impact of these new settings for New South Wales, and combined with the latest Estimated Resident Population data from the ABS this presents a challenging picture for the state. 

The 2022 NSW Common Planning Assumptions (CPA) population projections were compiled in late 2021 and early 2022 at a time of significant uncertainty. The estimates at the time projected a slow return to historic levels of net overseas migration. ABS data since then has shown the country has seen a sharp recovery in migration levels, with Mecone projecting a net migration peak of around 170,000 people over the full 2022/23 financial year. 

Assuming NSW continues to receive its historic share of net overseas migration, Mecone estimates that the Commonwealth Government’s new policy settings would lead a steady reduction in migration levels from this peak towards a more normal level of migration – although still well above the 2022 CPA projections. 

The cumulative impact of these high net overseas migration levels will be significant. Over the five years between July 2021 and June 2026, Mecone projects that net overseas migration will add around 550,000 people to the population of New South Wales. This is close to 4x the 144,000 people projected in the main series of the 2022 CPA, and around double the 280,000 people projected in the high series.  

Mecone projects that the combined overall impact of the recent migration boom and the new Commonwealth Government migration estimates is that the NSW population is running about 2 years ahead of the main 2022 CPA population projections – and is likely to reach around 8.5 million people in late 2024. The population growth in NSW is running so hot that is now even exceeding the 2022 CPA high series. 

While the overall impact on population in NSW will be slightly mitigated by lower-than-expected fertility rates and higher-than-expected levels of Net Interstate Migration (with more people leaving the state, particularly for Queensland), these are relatively minor effects by comparison. 

While we keenly await the next round of population projections to see the full distributional impacts, it’s clear even just looking from a macro level that the sudden population boom in NSW has major policy implications.  

We’re pleased to see the recent announcements from Premier Minns and Minister Scully around transit-oriented development that should help unlock additional housing capacity, and Mecone is keen to help contribute to meeting the needs of NSWs growing population in a responsible and balanced way.