Chapter 2: Human Settlement

2.1 Population and settlement patterns

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2.1 Population and settlement patterns

Population growth in NSW splits into three distinct groups – urban, coastal and rural – with strong growth a continuing feature of the first two

The major population growth areas of NSW are along the coast and in the Greater Metropolitan Region of Sydney, Illawarra and the lower Hunter. The latter's growth of around 59,000 residents per year is equivalent to adding a city the size of Wagga Wagga every year. The population of coastal regions outside Sydney is currently growing at 1.5% per annum, which is slower than in the early 1990s. Inland populations are growing at a vastly slower rate, with a trend for rural people to move to the larger inland population centres.

Urban consolidation policies are changing the pattern of development in large cities, with half the current net increase in dwellings occurring in the inner- and middle-ring suburbs of Sydney. The absolute rate of increase in new dwellings on Sydney's urban fringe is stable and continuing. Since the average number of people per household is decreasing in Sydney – and across NSW – the number of dwellings is rising proportionally faster than population. Negative impacts from urban consolidation, such as a loss of amenity and pressures on urban infrastructure, are also being noted.

NSW Indicators


Status of Indicator

2.1 Population distribution

Over 17 out of every 20 NSW residents live in either the Greater Metropolitan Region or in coastal areas.

2.2 Residential density

The population density in the Greater Metropolitan Region has increased, although the majority of the population continues to live in low-density housing.

2.3 Changes in urban land use

The proportion of new dwellings built on Sydney's urban fringe has declined significantly, although the absolute rate of increase is stable at around 8000 extra dwellings per year.

Importance of the issue

Population distribution and change

As populations grow, the demands for infrastructure, such as housing, energy, water, transport and waste disposal, also increases. Supplying this infrastructure results in land-use changes and other impacts on the environment. Sound planning is needed to minimise and manage these impacts. Traditionally, Australians have preferred living in low-density housing (Read et al. 1995), resulting in a decentralised settlement pattern with an ever-growing suburban population removed from city centres and extending the area affected by urban development. In the coastal regions of NSW, population growth and development creates strong pressure on the environment, with impacts such as loss of ecosystems, and sedimentation and nutrient pollution in coastal lakes and estuaries.

The preliminary estimated resident population of NSW in June 2002 was 6,640,355, an increase of 1.0% from the 6,575,217 recorded in June 2001 (ABS 2002a). Between 1996 and 2001 the population of NSW increased by 370,000 people, at an average annual growth rate of just under 1.2%.

Over 85% of the NSW population lives in either the Greater Metropolitan Region (GMR: Sydney, the Illawarra and lower Hunter) or the coastal regions outside the GMR. Together these make up about 9% of the total area of the State. The GMR itself covers just 2.5% of NSW, but contains 75% of its population (ABS 2002a). Land-use changes on the coast are significant: for example, between Tweed Heads and Kingscliff on the North Coast, residential land use has more than doubled since the late 1970s and the area of commercial land has increased four-fold from 40 to 166 hectares (EPA data, as at 2002). In the GMR, urban consolidation creates pressures on amenity, such as urban green space (see Human Settlement 2.7), and on infrastructure, such as transport networks (see Human Settlement 2.4).

Sydney grew by almost 50,000 residents a year between 1996 and 2001, an average annual growth rate of just over 1.2%. The GMR as a whole grew at the same rate and increased by about 59,000 residents annually, equivalent to a new Wagga Wagga every year (see Table 2.1). Sydney and the GMR as a whole are experiencing their strongest growth since the 1960s.

The total population of coastal regions outside the GMR grew at an average rate of 1.6% per annum between 1996 and 2001, down from the 2.0% recorded between 1991 and 1996, and significantly lower than the growth rate between 1981 and 1991.

In the inland region, the overall population is growing very slightly (less than 0.5% per year), although some of the larger inland towns are experiencing higher growth than this as people move to them from smaller population centres. The Bathurst–Orange, Albury, Mudgee and Dubbo regions recorded population growth between 1996 and 2001, while populations in Broken Hill, the Far West region as a whole, and outlying areas of the North-western region declined.

Table 2.1: Average annual population increase and growth rates, NSW regions, 1981–2002


1981–1986 Average annual population increase (growth rate)

1986–1991 Average annual population increase (growth rate)

1991–1996 Average annual population increase (growth rate)

1996–2001 Average annual population increase (growth rate)

2001–2002 Population increase (growth rate)

Sydney SD

38,410 (1.1%)

40,261 (1.1%)

41,656 (1.1%)

49,427 (1.2%)

42,655 (1.0%)

Greater Metropolitan Region (GMR)(a)

42,060 (1.0%)

49,380 (1.2%)

48,283 (1.1%)

58,968 (1.2%)

50,833 (1.0%)

Coastal regions outside GMR(b)

14,092 (3.2%)

17,758 (3.4%)

11,945 (2.0%)

10,390 (1.6%)

10,239 (1.5%)


3,168 (0.4%)

6,309 (0.7%)

971 (0.1%)

4,739 (0.5%)

4,066 (0.4%)


59,320 (1.1%)

73,447 (1.3%)

61,199 (1.0%)

74,097 (1.2%)

65,138 (1.0%)

Source: ABS 2002b

Notes: (a) Comprises all statistical local areas (SLAs)/local government areas (LGAs) in the Sydney Statistical Division (SD), Newcastle Statistical Subdivision (SSD), Wollongong SSD and Wingecarribee SLA
(b) Comprises all SLAs/LGAs in the Richmond–Tweed SD, Mid-North Coast SD and the following: Great Lakes, Shoalhaven, Eurobodalla and Bega Valley
(c) Comprises all SLAs/LGAs not included in either the GMR or coastal regions outside the GMR

In 1999–2000, over 40% of Australia's net overseas migration settled in NSW, contributing 61% of the State's population growth. In addition, the number of long-term visitors, in NSW for education, employment and business purposes, was at its highest in 20 years.

Short-term tourism also places great pressure on natural and built environments. In 1999–2000, a total of 4.3 million international visitors came to Australia, and 58% of them visited NSW. Sydney that year received 32% of the 8.6 million domestic visitors to NSW. Over the next 20 years the NSW tourism growth rate is forecast to outstrip population growth (BTR 2002).

The NSW population is projected to increase by approximately 1 million people to around 7.6 million by 2026 (DUAP 1999a). Coastal regions outside Sydney are expected to continue their strong growth, but the rate of increase will slow. These regions are forecast to absorb almost one-third of the projected NSW population increase over the next 20 years, and by 2026 to be home to 26% of the population. The NSW inland population is projected to fall to approximately 717,000 people by 2026, a decrease of around 37,000 people from 1996. This decline will be driven by anticipated changes in the number of births and deaths. The ageing of the NSW population is expected to continue so that by 2026 approximately one-third of people are likely to be aged 55 or more (Culpin et al. 2000).

Demographic change and household and family structure

Shifts in demographics drive changes in land use, as they contribute to the demand for housing types which best accommodate different household structures, age groups and lifestyles. For example, a change in household structure to fewer people per dwelling generates substantial demand for new dwellings.

The NSW population is ageing because of improved life expectancy and the demographic 'bulge' of the baby boomer generation. This older population is having an impact on household forms, which are becoming more diverse with fewer individuals per household requiring more dwellings. Household numbers are increasing faster than the population and this has been a consistent trend since 1976 (ABS 2001a). Between 1996 and 2000, the NSW population grew by 5.5%, but the number of dwellings rose 9%. Sydney continues to have the largest average household size of any Australian capital city, with 2.7 people per household. Couples with dependent children decreased from 44% of households in 1991 to 41% in 2001, while the total number of households with 1–2 people grew 31%. Since 1996 more than 50% of Sydney households have comprised one or two people (ABS 2001c).

Approximately 30% of all Indigenous Australians live in NSW, with two-thirds of them living outside Sydney. Aboriginal populations are proportionally highest in the Northern, North-West and Far West regions of NSW. Compared with the NSW population as a whole, Indigenous Australians tend to have more diverse household structures and live in larger households (Memmott & Moran 2001).

Residential density

The vast majority of population growth in the GMR occurs in Sydney. Between 1996 and 2001, for example, Sydney accounted for 84% of the growth (ABS 2001b). Patterns of residential growth and development are changing to accommodate this growth. Inner- and middle-ring suburbs now accommodate a larger share of the population and housing growth (see Figure 2.1). These areas accounted for over 50% of the net increase in dwelling stock in 2000–01, compared with around 30% seven years earlier.

The increased delivery of dwellings to the inner- and middle-ring suburbs is supplying a diversity of housing choice in accessible locations. The increase has predominantly been in the form of multi-unit dwellings. Despite urban consolidation, the overall population density in the GMR has only increased slightly over the last decade and the majority of Sydney people continue to live in low-density outer suburbs. While the relative share of new growth for Sydney's urban fringe has declined, the absolute rate of increase continues at around 8000 dwellings per annum.

Figure 2.1: Regional proportions of net increases in dwellings, Sydney, 1993–2001

Figure 2.1

Download Data

Source: PlanningNSW data, as at 2002

Notes: UDP = Urban Development Program
Inner, middle and outer rings are based on groupings of Sydney local government areas as determined by PlanningNSW.

Response to the issue

Population growth in NSW is a function of natural factors, including the number of births and deaths, as well as immigration. While the State Government does not control population growth, it is active in managing settlement patterns within NSW. The response to this issue takes place within the legislative framework for land-use management and planning. This involves planning activities at State, regional and local levels, and implementing individual policies and programs to integrate economic development with transport and the environment.

Land-use management and planning

The Environmental Planning and Assessment Act 1979 sets the framework for planning and land-use management in NSW. The NSW Government uses legislative instruments such as state environmental planning policies (SEPPs) and regional environmental plans (REPs) to deliver desired planning and development outcomes. Municipal government has responsibility for planning at the local level through local environmental plans (LEPs) and development control plans (DCPs).

The Department of Infrastructure, Planning and Natural Resources sets the overall land-use and planning directions for NSW. Recent changes to the plan-making system through the PlanFIRST program are designed to progress comprehensive, integrated regional planning across NSW.

Shaping Our Cities (DoP 1998) is the most recent strategy guiding development in NSW and aims to:

  • manage housing stock to provide choices about type and affordability within a compact urban structure
  • identify and create growth in employment and business at locations accessible to transport while minimising land-use conflicts.

The Government's Integrating Land Use and Transport policy package (DUAP 2001) aims to achieve sustainable cities and towns by ensuring that development occurs in tandem with public investment in transport infrastructure.

The NSW Coastal Policy and more recently the NSW Coastal Protection Package provide the framework for integrated planning for coastal regions. In March 2003, the Coastal Council of NSW released Coastal Design Guidelines for NSW to facilitate improved coastal urban form and design.

State Government policy is to encourage higher urban densities and better designs in new and established residential areas, and to couple public transport accessibility with urban redevelopments. Initiatives such as the Premier's Design Quality Program, the Sustainability Advisory Council and the Urban Improvement Program address multi-unit dwelling design, the sustainability of the built environment, urban renewal and community building.

The Metropolitan Development Program, announced in late 2001, coordinates the planning and servicing of newly released residential development and urban renewal lands in the GMR and directly links development with the provision of public transport. The aim is to increase outer-ring average gross residential densities from 11 dwellings per hectare to a minimum of 15 in the long term. As over 50% of Sydney households consist of 1–2 persons, increased dwelling densities may not directly deliver higher population densities, but will provide an efficient means of housing Sydney's increasing and changing population.

Local government has supported the overall directions for the GMR through a range of local planning instruments. The State Government and local councils have worked in partnership on improvement strategies and area assistance plans for the Central Coast and Western Sydney. Greater emphasis is being made on providing public transport, accessibility and urban design.

The Department of Infrastructure, Planning and Natural Resources has established a Sustainability Unit and holds annual Sustainable Sydney conferences to involve the community, industry and business in developing and sharing ideas on how to build a more sustainable city.

Initiatives in rural and regional NSW are assisting communities and local government to anticipate and respond strategically to change. These include the recent development guidelines Rural Residential Strategies (DUAP 1999b) and rural and regional Living Centre programs in Bega, Griffith and Lismore that are helping communities take a strategic approach to the challenges of structural adjustment.

Effectiveness of responses

In Sydney there has been a large shift of new development activity to established inner areas, consolidating dwellings around existing transport and other services. Land use and transport are being better integrated through the Integrating Land Use and Transport policy package. Across the city, government agencies and communities are working together to deliver strategic urban renewal and community building programs.

On Sydney's urban fringe, the absolute rate of growth of new dwellings is stable and continuing. The challenge is to find ways of ensuring early provision of transport, infrastructure and other services in the further development of these areas.

Future directions

Government needs to focus on planning and funding the essential infrastructure necessary to service sustainable urban development and continue efforts to better integrate planning of transport and urban form. The recent decision by the NSW Government to consolidate the planning aspects of the Department of Transport and the land-use planning function within the Department of Infrastructure, Planning and Natural Resources is intended to facilitate this. The use of regional, place-based planning processes will provide a way for all stakeholders to come together and focus on a strategic picture for their regions.

Individuals will settle in areas where opportunities are the greatest. The environmental impacts of settlement are not ultimately determined by how many people live in NSW, but rather by how people live and their level of consumption. For example, everyday decisions about water and energy consumption, transport and waste generation are important determinants. These and other issues are considered in this chapter in the context of what actions government, developers, industries and individuals can take to build a more sustainable NSW.

Linked issues

2.3 Energy consumption

2.4 Transport

2.5 Waste management

2.7 Amenity

3.3 Urban air quality