SoE 2009 > People and the Environment > 1.2 Population and settlement patterns

1.2 Population and settlement patterns

The population of New South Wales grew 1.1% in 2007–08 to 6.97 million people. The state is implementing long-term strategic planning measures to guide development and improve natural resource management in response to the increased pressure larger numbers of people will present.

While population growth in the early 2000s was relatively slow, growth rates have increased above average in the last two years, largely due to increases in fertility rates and overseas migration. The state's population is projected to increase to 9.1 million people by 2036, putting further demands on the NSW environment.

The Government's long-term Metropolitan Strategy for Sydney has now been in place for four years and subregional strategies are being developed to guide planning on a local scale. Outside Sydney, regional strategies have been released for areas of rapid population growth, including the NSW coast, while regional conservation plans are also being prepared to reduce the adverse impact of development on the natural environment.

Use of these long-term strategies is designed to plan for the expected increases in population in a way that will maximise the environmental, social and economic sustainability of NSW.

Introduction

Natural increases and net overseas migration drive population growth in NSW. Demands for housing, transport, employment and infrastructure for waste disposal all increase as the population grows, along with energy and water use. Population growth can also increase fragmentation of fragile ecosystems, especially where per capita consumption is on the rise (see People and the Environment 1.3).

Status and trends

Population distribution and residential density

The preliminary estimated resident population of NSW in June 2008 was 6.97 million, representing just under a third of the total Australian population of 21.64 million (ABS 2009a). In the last two years population growth in NSW has picked up from the relatively slow increases of the early 2000s, with growth in the 2007–08 financial year reaching 79,000 (a 1.1% increase), significantly above the low of 35,000 in 2003–04 (ABS 2008a). This variation in growth is typical of population trends, mainly due to the cyclical nature of net migration, which includes interstate and overseas migration.

There was a major fall in the contribution of net migration to population growth in the early 2000s when net overseas migration fell and net interstate migration increased (Figure 1.1). More recently, the share of net migration has risen with an increase in net overseas migration and a reduction in losses from net interstate migration. While natural increase in 2007–08 was less than 2006–07, natural population growth in NSW is projected to slowly increase over the next two decades, and then gradually decline as the population ages.

Gains from net overseas migration and losses from net interstate migration are long-established migration trends for NSW. The population of the state is projected to increase to 9.1 million people by 2036, with 60% of this growth driven by natural increase (births minus deaths) and the remainder by net migration. This number is greater than previous projections due to an increase in fertility in recent years and high levels of net overseas migration (DoP 2008a).

Figure 1.1: Natural increase and net migration in NSW, 1971–72 to 2007–08

Source: ABS 2008a; ABS 2009a

Notes: In some years shown on the graph, natural increase is below net migration.

Table 1.1 outlines NSW population trends within four major regions of the state. The Greater Metropolitan Region (GMR₁) encompasses only 2.2% of the total NSW landmass but has 75% of its population. Population growth in Sydney and GMR₁ has remained reasonably steady since 1981, with the lower net migration levels in 2001–06 being offset by substantial increases in 2006–08. The population of Sydney is projected to grow from 4.3 million in 2006 to 6.0 million in 2036. Growth rates in the coastal regions outside GMR₁ have declined, although they are still the fastest growing populations in NSW. Population growth in inland NSW has remained low. While some inland regions (Murrumbidgee, Murray and the Central West) are expected to experience modest population growth to 2036, others (Northern and North-Western regions) are expected to experience population decline (DoP 2008a).

Table 1.1: Average annual population increase and growth rates in NSW regions, 1981–2006

Source: ABS 2006a

Notes: 'GMR₁' comprises all statistical local areas (SLAs)/local government areas (LGAs) in the Sydney Statistical Division (SD), Newcastle Statistical Subdivision (SSD) and Wollongong SSD.
'Coastal regions outside GMR₁' comprises all SLAs/LGAs in the Richmond–Tweed SD, Mid-North Coast SD and the following LGAs: Great Lakes, Shoalhaven, Eurobodalla and Bega Valley.
'Inland' comprises all SLAs/LGAs not included in either the GMR₁ or coastal regions outside GMR₁.

The pressure of population on the environment is enhanced by the number of short-term tourists visiting NSW. In the year ending September 2008, NSW received 2.8 million international overnight visitors, 54% of the Australian total. Of those, 2.7 million people visited Sydney. Additionally, NSW hosted 24.3 million domestic visitors, who spent a total of 82.2 million nights in the state. The large numbers of visitors create additional demands on the natural and built environments of NSW. Monitoring and projecting tourist numbers therefore is an important part of the planning process (Tourism NSW 2008a; Tourism NSW 2008b; Tourism NSW 2008c).

Demographic change and household and family structure

The population of NSW is shifting in age distribution as well as geographic distribution. A key demographic process occurring throughout the state, as elsewhere in Australia, is population ageing: an increase in the proportion of the population in the elderly age brackets (usually defined as 65 years and above). This demographic ageing effect is occurring as a result of past falls in the fertility rate and increasing life expectancy. Figure 1.2 illustrates how the state's population has aged over the 10 years between 1996 and 2006.

Figure 1.2: Age-sex structure of the NSW population, 1996 and 2006

Source: ABS 2006a

Changes in age structure is a key influence on changing household structure because the propensity to live in different household types varies considerably by age (ABS 2005). Figure 1.3 shows household projections for NSW for 2006 to 2036 (DoP 2008b). Over this 30-year period, the total number of households is expected to increase from 2.65 million in 2006 to 3.72 million, including an extra 740,000 households in Sydney. The largest percentage increases are forecast for lone person households (up 64% by 2036) and couples without children (up 53%). Overall average household size is projected to fall slightly from 2.53 to 2.38 between 2006 and 2036.

Figure 1.3: Projections of households by type, NSW, 2006–36

Source: Department of Planning data 2008

Residential density patterns

The density of the eastern part of the Sydney Metropolitan Area is significantly higher than the western portion, but there are clusters of higher density development around centres and train stations throughout the city (Map 1.4). The eastern part has been extensively redeveloped since initial development took place, while in the west many dwellings are the first since the land was developed for housing.

Map 1.4: Residential density, Sydney Metropolitan Area

Notes: Map is diagrammatic only.
Whole 2006 census collector districts are shaded rather than actual housing lots.
Density is in dwellings per hectare of residential and commercially zoned land.

Housing affordability

State Plan 2006: A new direction for NSW lists housing affordability as one of the State Government's environmental priorities (NSW Government 2006a). The development of affordable housing has close links with infrastructure, transport and urban sustainability. Existing urban areas have been the sites of most new dwellings in Sydney since 2003–04. In 2006–07 the share was 84% but this is expected to progressively drop back towards the 70% benchmark on affordable housing under priority E6 of State Plan 2006 (discussed in Responses below). In the 10 years to July 2007, just over 249,000 dwellings were built in the existing urban areas of Sydney, with almost 103,000 (41%) built in transit nodes, the walkable catchment of 800 metres from a rail station and 400 m from a major bus node or light rail stop.

A review of State Plan 2006 commenced in August 2009 and this may adjust some of the plan's priorities and targets.

The potential of greenfield release areas on the metro fringe to provide for further residential development has increased over the past three years, mainly as a result of Government action. Production in these areas has been around 2300 dwellings per year over that period. Stocks of zoned and serviced land have increased and are sufficient to meet demand for more than 16 years. This provides a generous supply buffer and ample scope to accommodate any improvement in the housing market generated by the economic stimulus initiatives and an upturn in the property cycle.

Pressures

Pressures resulting from population growth are complex and need to be managed appropriately. Population growth places extra demands on infrastructure and natural resources, yet also brings economic and social benefits. The Government aims to mitigate the negative impacts of growth through long-term planning strategies. Further pressures resulting from population growth, such as water and energy consumption, transport demands and waste, are discussed in the Human Settlement Chapter.

Responses

Sydney Metropolitan Strategy and subregional strategies

The NSW Government planning strategy, Metropolitan Strategy: City of Cities – A plan for Sydney's future, which provides the planning framework for growth in Sydney to 2031, has been in place for four years (DoP 2005). The strategy's Action G5.6 outlines a five-yearly review process to coincide with the census cycle. The first of these reviews is due to commence soon for delivery in 2010.

One of the five core aims of the Metropolitan Strategy is to 'Protect the environment – protect Sydney's unique environmental setting and reduce the use of natural resources and the production of waste'. The strategy's initiatives and objectives E1–E4 establish targets for sustainable growth, seek to protect Sydney's natural environment, achieve sustainable use of natural resources, and protect valuable rural activities and resource lands. In addressing Sydney's environmental challenges, the strategy includes actions to conserve biodiversity, protect air quality, manage with less water, move towards cleaner energy, protect viable agriculture and resource land, and respond to the risk of climate change (DoP 2005).

The metropolitan area of Sydney has been arranged into 10 subregions that combine local government areas sharing similar issues and challenges in planning for growth and managing change. Draft subregional strategies with 25-year time frames have been publicly exhibited for all of the subregions. These draft strategies provide a broad framework for the long-term development of each area by applying metropolitan housing and job capacity targets at a local level. The proposed strategies also provide context for the preparation of local environmental plans (LEPs), which guide local land-use planning (DoP 2007).

The Metropolitan Strategy and draft subregional strategies employ the concept of 'strategic centres' that focuses on the regional cities of Global Sydney, Parramatta, Liverpool and Penrith, as well as numerous major and specialised centres. The strategies aim to ensure there is at least one significant centre with cultural, entertainment, retail and employment opportunities within easy reach of all in the community. The strategies also require that a significant majority of all new housing is located within walking distance of existing and new centres. This aligns with the target under Priority E5 of State Plan 2006, which seeks to increase the number of people who live within 30 minutes by public transport of a city or major centre (NSW Government 2006a).

Regional strategies and regional conservation plans

The Metropolitan Strategy is complemented by regional strategies that have been released for the Far North Coast, Mid-North Coast, Lower Hunter, Central Coast, Illawarra, South Coast and the Sydney–Canberra corridor. In addition, the Draft Murray Regional Strategy will be released for public consultation in 2009. The regional strategies complement regional infrastructure requirements identified in the State Infrastructure Strategy 2008–09 to provide a coordinated statewide approach to infrastructure management. Councils are required to consider and be consistent with the vision, policies and actions of the relevant regional strategy when preparing their LEPs.

Some of the regional strategies are also linked to regional conservation planning processes so that areas of environmental and conservation value are identified and protected through regional conservation plans. The first of these plans, the Lower Hunter Regional Conservation Plan, was adopted by the NSW Government in 2009. Draft regional conservation plans are expected to be released for the Far North Coast and South Coast in late 2009.

Housing affordability

The NSW Government recognises the importance of affordable housing to maintaining a vibrant, healthy and fair community. Under Priority E6 of State Plan 2006, the Government is planning for 640,000 new dwellings to be built in the Sydney Region between 2004 and 2031, with 445,000 of these in existing urban areas and the remainder in greenfield locations. The Government also aims to have 55,000 zoned and serviced lots ready for development by 2009 (NSW Government 2006a).

Using the Metropolitan Strategy and the Metropolitan Development Program, the NSW Government has initiated a number of programs and services to address housing affordability, seeking to meet the targets under Priority E6. In addition to the new dwellings planned for the Sydney Region, the Government is using the regional strategies to plan for at least 300,000 new dwellings in regional areas.

Reforms

State Environmental Planning Policy (Affordable Rental Housing) 2009 was gazetted in July 2009 to encourage the private and community housing sectors to form new partnerships to create affordable housing. The SEPP will help increase the amount and diversity of affordable housing in the state. Low-rise development, such as villas and townhouses, will be permissible in all residential zones on sites close to public transport. Granny flats will be easier to construct under the SEPP as will new generation boarding houses which will feature modern self-contained accommodation. There are also substantial benefits to public housing under the new SEPP. The planning policy is complementary to the Australian Government's Nation-Building Economic Stimulus Plan and will increase the supply of public housing and thus help reduce the demand on private low-rental accommodation stock.

State Environmental Planning Policy (Rural Lands) 2008 has been introduced to provide additional certainty for rural lands across NSW. The SEPP applies to local government areas outside the Sydney metropolitan area, Newcastle, Gosford, Wyong, Wollongong and Lake Macquarie. Councils are not required to review minimum subdivision standards for rural land, but where they do, any new standards will need to be consistent with the principles of the Rural Lands SEPP. Other reforms have improved the plan-making process under Part 3 of the Environmental Planning and Assessment Act 1979 to:

• encourage a strategic approach to land-use planning, giving a sustainable balance between population needs and protection of the environment
• allow a streamlined approach to better target key issues that need to be investigated and resolved in land-use planning
• better connect to infrastructure planning by councils.

Future directions

From 2006 to 2036 the population of NSW is projected to grow by over 2.3 million as natural increase and net overseas migration drive growth; in this period Sydney's population is projected to grow by 1.7 million people. High levels of net overseas migration to Sydney will continue to be partially offset by net migration losses from Sydney to other parts of the state and interstate. The ageing of the population means that there will be an increasing number of people in the older age brackets, which may considerably alter labour force dynamics and commuting patterns. The environmental implications of the population living in an increased number of smaller households, especially lone person households, are also uncertain.

These trends place pressure on existing urban areas and their infrastructure, as well as biodiversity, native vegetation, green spaces, and rural and resource lands. The Sydney Metropolitan Strategy and supporting subregional strategies will provide a strong, long-term planning framework for managing growth in Sydney over a 25-year period. The strategies aim to contain the urban footprint and concentrate the majority of employment and housing growth in existing and planned centres. An ongoing challenge will be to ensure land use is controlled sustainably by strengthening local and strategic centres in order to more efficiently provide the necessary infrastructure to service the community. Regional strategies provide a similar framework for ensuring housing and employment needs are accommodated while protecting and enhancing the environment in growth areas of NSW.

The first major review of the Metropolitan Strategy is under way with outcomes due to be reported in 2010. The review will ensure that the strategy remains relevant as the key document guiding land-use planning for government in the Sydney Metropolitan Region until 2036. The review will consider and respond to new information and changing circumstances, including the latest population and household projections, and take into account the impacts on the Sydney Region of the global financial crisis, reprioritisation of infrastructure and climate change.