The changing face of the Inner City: Population and Household Projections

4 September 2014 | Posted In: 122 – Spring 2014, Planning and Built Environment Issues, Planning in Inner Sydney, Research, | Author: Kim Johnstone

New population, household and dwelling projections to 2031 for New South Wales and all NSW local government areas (LGAs) were released in May 2014. Dr Kim Johnstone explains what these projections tell us about the changing face of Inner Sydney.


2014 NSW Population, Household & Dwelling Projections

The projections indicate that New South Wales will grow by two million people between 2011 and 2031, with three-quarters of the growth taking place in Sydney.  Sydney is projected to grow from 4.3 to 5.9 million people over the 20 years 2011 to 2031.  Seventeen per cent of Sydney’s growth (267,000 people) is projected to be within the local government areas of Inner Sydney (see box for list of LGAs included here).  This article focuses on the projected changes for Inner Sydney and the reasons for those changes.

Inner Sydney LGAs Ashfield, Botany Bay, Burwood, Canada Bay, City of Sydney, Leichardt, Marrickville, Randwick, Strathfield, Waverley, Woollahra

Inner Sydney LGAs Ashfield, Botany Bay, Burwood, Canada Bay, City of Sydney, Leichardt, Marrickville, Randwick, Strathfield, Waverley, Woollahra

What are projections?

Population, household and dwelling projections are produced using mathematical models that take population or household composition at one point in time, and calculate likely futures.  They are based on the ‘usual resident’ population, that is people who normally live in a place and have lived there for six months or more.  All projections are based on assumptions about what will cause change.

  • Population projection assumptions are based on recent and current trends for births, deaths and migration (internal and international).
  • Household projections use the population projections and assume the likelihood of living in particular types of households at particular ages remains the same.  As the number of people at each age changes, the number of projected households changes in response.
  • Dwelling projections assume every projected household lives in a dwelling.  They also assume that the level of unoccupied dwellings measured in the 2011 Census remains the same over time so there are always more projected dwellings than projected households.

Inner Sydney at 2031

In 2011, there were 819,400 people who lived in Inner Sydney.  This population is projected to grow to 1.09 million people by 2031, or 267,000 more people.  Average annual growth is projected to be over one per cent, as is projected for all LGAs within Sydney.  Projected population growth rates for Inner Sydney reflect growth rates that have been seen since the turn of the 21st century in the area.  As the figure shows, average annual growth rates were just under one per cent during 1996 to 2001, and rose to 1.4% during 2001-2006.  Growth rates reached 1.9% during 2006-2011.

Inner Sydney Average Growth rate 1996-2031

Over the 20 years 2011-2031, the unique age profile of Inner Sydney, shown in the population pyramid, is projected to remain the same.  Ageing is projected for Inner Sydney, as is taking place across all of Australia.  The impact of this ageing will be seen in two ways.  First, there will be a notable increase in the number of people aged 65 and older, from 95,600 in 2011 to 166,050 in 2031.  This is an average annual increase of 2.8%.  Projected growth is even higher at the oldest ages (85+ years) with average annual growth of 3.2% projected for Inner Sydney.  The second impact of ageing is the larger proportion of the population at older ages.  Age dependency is a measure comparing the population aged 65 and older with those aged 15-64 years.  In 2011 the ratio was 16 people 65+ years for every 100 people 15-64 years.  By 2031, this ratio is projected to increase to 22 per 100.

Inner Sydney Population by Age 2011 and 2031

Alongside the increase in older persons, there will also be an increase in the number of people at the youngest ages.  There were 109,700 children aged under 15 living in Inner Sydney in 2011 and this is projected to increase to 159,300 by 2031.  The population pyramid shows that there is little growth in the number of people aged in their 20s compared to the other age groups.  This reflects the continued in and out migration flows of people at these ages.  Students may arrive for study over several years but not remain in the areas.  It is also likely to reflect some children born in this area not staying in the area once they reach their late 20s.

Method for projecting population

The cohort component model has been used for the 2014 NSW Population Projections. The model takes a population broken down by age groups, and moves them forward in time making assumptions about how many people will die at each age, how many babies women will have at certain ages, and how many people will move into and out of an area. It is the most common projection method used by demographers. The model is like financial accounting – start with a population, add incomings (births and migration), subtract outgoings (deaths and migration), and at the end of the year there is a new population size.  The assumptions about these incomings (births and migration) and outgoing (deaths and migration) are very important.  The cohort component model outputs projected population size by age and sex.  From this information, projected growth rates and other measures can be calculated.

The projected population growth is reflected in the projected number of households that are expected to live across Inner Sydney.  The number of households is projected to increase from 350,400 in 2011 to 470,350 by 2031.  The biggest increase will be seen in lone person households.  This was the most common household type in 2011 with 116,650 people living alone, and by 2031 it is likely that the number will reach 167,600.  This increase partly reflects the ageing of the population.  The increase in the number of lone person households will see a slight change in projected average household size with a decline from 2.27 people per household in 2011 to 2.24 people in 2031.

Method for projecting households

Household projections are produced once the population projections are finalised.  The household projection model begins with data on current living arrangements of the population based on the 2011 Census and the population projections.  First, the population is separated into people who live in a private dwelling and those who live in a non-private dwellings (e.g. hotel, motel, hospital, retirement home, hostel for the homeless).  The projected living arrangements of people living in private dwellings are then calculated in a series of steps which become more detailed at each step. For example, children are divided into those under and over the age of 15 years; then whether they are living with both parents or in a single-parent family. Once the different living arrangement groups are applied to the population projections, they are converted into projected numbers of households.

In 2011 about one-third of all households had children in them (young and adult children), and this ratio is projected to stay about the same.  The number of couple with children households is likely to increase from 77,550 to 104,300, a reflection of adult children staying at home longer as well as couples starting new families.

Inner Sydney Households by Type

Not unexpectedly, the projected increase in the number of households within Inner Sydney is mirrored by a projected increase in the number of dwellings.  The projected number of dwellings needed to house the population is 512,100 by 2031, a rise from 381,400 dwellings in 2011.

Method for projecting dwellings

Projected dwellings are based on household projections.  Their proper name is implied dwellings, and they reflect the likely demand for dwellings based on the projected population.  The dwelling projections do not reflect dwelling construction forecasts.  It is assumed that one household occupies a dwelling.  No assumptions are made about what type of dwelling that might be, or its size.  An additional adjustment is made to account for those dwellings that might be unoccupied based on the measure of unoccupied dwellings from the 2011 Census.

What is causing the projected growth?

Only three things can cause populations to change: births, deaths and migration.  The cohort component model used to project population growth allows us to see the impact on each of these aspects over time and their contribution to population change.

Inner SydneyReasons for Population Change

Natural increase is the difference between the number of births and the number of deaths.  Natural increase is an important driver of Inner Sydney’s projected growth.  Well over half of the growth across Inner Sydney is from people who live there having babies.  This is not surprising in light of the age structure of Inner Sydney.  The largest age group across Inner Sydney is the 30-34 year age group, and this is also the peak age of childbearing in New South Wales.

Are causes of future growth different from the past?

The underlying dynamics of Inner Sydney’s population change are projected to be the same – that is people will continue to move in and out of the area, young couples will have babies and older people will reach the end of their lives.  Two things are emerging for projected population growth that differ from past population change.  The first is that fertility rates (the number of babies born to each woman) have returned to higher levels compared to the recent past.  Alongside this, the number of women reaching the ages of having children has grown.  These two factors combined mean more children being born in the future.  The second difference is that the levels of overseas migration to Australia in the 21st Century are higher than any time in the past.  Overseas migrants are anyone arriving in Australia for 12 months or more, including returning Australians who themselves have been out of the country for 12 months or more.  Forecasts from the Department of Immigration and Border Protection show that overseas migration levels are likely to remain at these high levels.

The rest of the growth comes from migration.  Within Inner Sydney there are constant moves of people in and out of the area – to and from overseas, other parts of Sydney, regional and rural New South Wales, and interstate.  The final result of these moves is net migration and it is an important driver of Inner Sydney’s growth over the 20 years 2011-2031.  Migration is highly age-specific, with most moves being made by people in their 20s.  There are subsequent flow-on effects for natural increase as these people establish new households and families after they have moved to an area.

The impact of migration

Inner Sydney has a long history of in and out migration flows that have driven population growth, and been a major factor contributing to the age profile of the area.  Migration is highly age-specific, and the projections assume that the patterns of movement by age seen in the past will continue.  For Inner Sydney, people have been most likely to move into the area in their 20s.  There have then been movements out of the area among people aged in their 30s.  These in and out movements came from within Australia and overseas.  Over one-third of the Inner Sydney population was born overseas.  The 2011 Census shows that among those born overseas, 42% arrived in Australia after the year 2000, a further 42% arrived between 1971 and 2000, and 16% arrived before 1971, reflecting a long history of immigration to Inner Sydney.  For migration within Australia, over half of people who have moved to and from Inner Sydney were making a move within Greater Sydney.  There were also moves to and from other parts of New South Wales, and moves interstate.  These in and out moves are part of the Inner Sydney dynamic and they are likely to continue.  It is one of the reasons the distinctive age profile of the area is seen.

These drivers of population change are very important when looking at the projected population growth for Inner Sydney and trying to understand the implications.  While changes to the assumptions for births, deaths and migration can lead to a different projected population size, these underlying drivers of population change will remain the same.  Women in their 20s and 30s will continue to have babies, and people in their 20s will continue to move.  The young age profile of Inner Sydney means these two factors alone will contribute to continued growth.


Population growth has implications across Inner Sydney in terms of demand for housing, services, jobs … all the things that people want in their community.  The projected age structure of Inner Sydney means there is likely to be increasing demand for housing, for example, from adult children who want to leave home but stay living in the place they’ve grown up in.

There will be growth in the number of young and teenage children across Inner Sydney.  Most are projected to live with two parents, and a quarter with a single parent.  This means increased demand for childcare, schools, sports clubs and so forth.

There are specific implications linked to the projected population ageing that will affect Inner Sydney.  This is likely to affect housing and residential care demand, as well as transport and age-specific services.  The implications of having a greater share of the population entitled to aged-care concessions may also affect some agencies that rely on fees for income.  It also represents an opportunity, with a growing market of people approaching or at retirement.

This projected mix of young and older people means a continued dynamic and vibrant future for Inner Sydney.

Dr Kim Johnstone is the Senior Demographer at the NSW Department of Planning & Environment

For more information

More information is available from the Department of Planning & Environment website:

An interactive map shows key data for each local government area, a video highlighting key projected changes and data spreadsheets are available.  Resources outlining the method, sources of data and assumptions used for the projections can also be looked at.