The flow of people leaving NSW for other parts of the country has fallen to the lowest mark in three decades as the relative strength of the state economy underpins a rising population growth rate.
The population of NSW reached 7.52 million at the end of June after growing by 1.5 per cent in 2013-14, the highest rate in five years.
For much of the past decade a sluggish economy and high house prices weighed on the state's population growth as large numbers left NSW for other states. But the Bureau of Statistics' latest population estimates show the exodus has slowed to a trickle. NSW had a net loss of only 6857 people to other states in 2013-14, the lowest since 1983. A decade ago NSW was losing over 30,000 people a year to other states, more than four times the net loss last financial year.
NSW is also proving attractive to migrants from other countries. Net overseas migration to NSW reached a five-year high of 71,300 in 2013-14, 6300 more than the previous financial year.
The state's population growth coincides with a stronger economic performance, especially in Sydney. A report released last month by SGS Economics and Planning found Sydney's economy expanded by 4.3 per cent in 2013-14, the fastest rate in 14 years. Commsec economist Savanth Sebastian said NSW's population growth rate is now 23 per cent above its decade average. Migration flows were now favouring NSW as the economies of the big mineral-rich states of Western Australia and Queensland weakened as the mining boom faded.
"For any new migrant job security is the key and the strength of the NSW economy is now making it a favoured place for residence," Mr Sebastian said.
Western Australia and Queensland have experienced big falls in net overseas migration recently, the Bureau of Statistics said. In the June quarter Western Australia registered a decrease of nearly 20,000 – close to 40 per cent. Western Australia's overall population growth rate peaked at a robust 3.7 per cent in 2012 but slumped to 2.2 per cent in the June quarter – the lowest rate in eight years. Queensland's population growth rate has also slowed and is now on par with NSW.
Three states with relatively small mining sectors – NSW, Victoria and Tasmania – were the only ones whose population growth rate increased in the June quarter.
The NSW government's half-yearly budget review, released on Thursday, drew attention to the economic benefits of strong population growth. It had helped the state economy gain momentum and would drive demand. Improved population growth would also boost the state's housing industry through 2014-15 and 2015-16, the budget review said.
Australia's population reached 23.5 million at the end of June after adding 364,900 people in 2013-14, a growth rate of 1.6 per cent. Overseas migration contributed 212,700 people and accounted for 58 per cent of Australia's population growth.
Bureau of Statistics spokeswoman Denise Carlton said the figures highlighted fast growth in Australia's population aged 65 years and over. "Over the last 20 years, this group has grown by 65 per cent, more than double the rate of increase for the working age population and four times faster than children," she said. "Because of this, Australia's median age has increased by four years over the last 20 years, from 33.4 years in 1994 to 37.3 years in 2014."
