High immigration levels are failing to make Australians richer – at least judging by the cities foreigners are moving to in droves.
A 2023 study by the Centre for Population partnered with the OECD found that Australian-born workers benefitted from boosted labour productivity, wages and employment rates in regions that had high migration.
According to the report, on average a region with 10 per cent larger migrant share had a 1.3 per cent larger regional wage difference, while a 1 per cent rise in annual migrant inflow, lead to a 0.53 per cent increase in employment for all genders and ages.
Sydney and Melbourne last year accommodated 61 per cent of the 340,800 new migrants who relocated to Australia.
But instead of boosting prosperity in Australia’s two biggest cities, rapid population growth from those who have relocated from overseas appears to only be causing a big exodus to other states – limiting economic activity.
Victoria last year housed 100,503 new overseas migrants or 29.4 per cent of the new permanent and long-term arrivals into Australia.
Australia’s most populous state, covering Melbourne, is home to 26 per cent of the nation’s 27.4million people but only comprises 22 per cent of the national gross domestic product.
Commonwealth Bank associate economist Lucinda Jerogin noted Victoria’s economic growth pace has lagged as 3,203 residents left for another part of Australia last year.
She said in Victoria, the ‘net number of interstate migration’ or the amount of people moving from within Australia to the state, ‘has been around zero for the last few quarters’.
‘This is well below the pre-Covid trend where Victoria was a popular destination for internal migrants.’
High immigration levels are failing to make Australians richer – at least judging by where foreigners are moving to (pictured is Melbourne’s Flinders Street Station)
Victoria is home to 26 per cent of the nation’s 27.4million people but only comprises 22 per cent of the national gross domestic product
‘Victoria’s economy is also weak. The unemployment rate is the highest of any state or territory,’ she said.
Victoria’s unemployment rate of 4.4 per cent is well above the national average of 4.1 per cent.
The state’s continuing exodus to other states and a weak economy also kept a lid on house prices with values falling by one per cent in the year to May.
They continued soaring in Brisbane and Perth – two cities receiving a big influx of interstate migration.
NSW is home to 31 per cent of Australia’s population but makes up 30 per cent of national GDP. Last year it received 106,730 foreign migrants, and 28,113 people left for another part of Australia.
‘Growth in the country’s largest state economy is sluggish,’ Ms Jerogin said.
By contrast, WA has Australia’s strongest population growth pace of 2.4 per cent, based on attracting 12,612 new interstate migrants last year on top of the 45,124 overseas migrants moving in.
The mining-rich state makes up 11 per cent of Australia’s population but makes up 17 per cent of the national economy, thanks to lucrative revenue streams from exporting iron ore to China.
Immigration levels are soaring under Anthony Albanese with almost two-thirds of new foreigners moving to Sydney (pictured) and Melbourne
WA is also resilient to Donald Trump’s tariffs, with exports of gold to the United States soaring by 31.6 per cent during the first three months of 2025.
‘WA exports have fallen off its peak, however, US destined exports have skyrocketed,’ Ms Jerogin said.
Queensland houses 20.5 per cent of Australia’s population and makes up 20 per cent of the national economy.
But some provincial states are contributing less to the economy.
SA makes up 7 per cent of Australia’s population but only 5 per cent of GDP.
It also saw 1,582 residents leave for another part of Australia.
‘The smaller states and territories are all also seeing negative interstate migration, a return to more normal trends that were present pre-Covid,’ Ms Jerogin said.
