Immigration drives Millennial families out of Sydney


The NSW Productivity Commission blames high housing costs for driving younger residents out of Sydney, resulting in a “brain drain” of 30 to 40 year olds.

ABC report on NSW Productivity Commission

The NSW Productivity Commission has blames a “lack of supply” and restrictive zoning as the drivers of Sydney’s housing crisis, which is forcing residents out. From the ABC:

“Sydney is at risk of becoming “the city with no grandchildren”, a senior government official has warned, as high housing costs drive young families to leave”.


“The state capital is losing twice as many people aged 30 to 40 as it gains, according to a paper by the NSW Productivity Commission”.

“If we don’t act, we could become a city with no grandchildren,” the agency’s commissioner Peter Achterstraat said”.

Sydney net migration

“The productivity commission found Sydney lost about 35,000 people aged 30-40 between 2016 and 2021”.

“The exodus of that group is a problem, according to Mr Achterstraat, because people in that age range are among the most productive in the workforce”…

“The productivity commission blames Sydney’s high housing prices on a lack of supply”….

“About a quarter of residential-zoned land within 10 kilometres of the CBD is subject to heritage protection restricting redevelopment”.

We can all agree that Sydney’s housing market is stuffed. Rents are astronomical:

Sydney median rents

The cost of buying and paying off a home in Sydney is also extortionate, with Sydney’s median house price hitting a record high $1,595,310 at the end of 2023:

Sydney median house price

But why has the NSW Productivity Commission presented the issue as a supply problem rather than an excess demand (net overseas migration) problem?

Net overseas migration into NSW hit a record high 174,000 in 2022-23, driving all of the state’s population growth:

NSW population growth

In the decade to June 2023, NSW added 935,315 people with 791,944 or 85% of this growth coming from net overseas migration. Most of this growth landed in Sydney:

NSW decade population change

Sydney’s population is also projected to grow to around nine million people by the 2060’s on the back of permanently high net overseas migration.

NOM projection

As long as Sydney’s population grows like a lab experiment via mass immigration, the city’s housing shortage will worsen, and house prices and rents will continue to climb. And this will drive more younger incumbent residents out of Sydney.

Anyone with common sense can see that the primary solution to Sydney’s (and Australia’s) housing shortage is to limit immigration to a level that is below the capacity to provide high-quality housing and infrastructure.


Otherwise, the housing crisis will be permanent.

The NSW Productivity Commission should be honest about the situation, instead of gaslighting people into believing it’s a supply issue.

Too much net overseas migration is the problem, and it is driving young residents out.

About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.