The population of NSW grew at its fastest pace in eight years in the year to September as increasing numbers of immigrants more than offset the loss of locals to Queensland.
Faster growth in the most populous state, along with sustained growth in Victoria, helped push Australia's total population up 1.6 per cent from a year earlier to 24.7 million and put the country on track to top 25 million in July, official figures showed on Thursday.
Strong economies, coupled with growing new housing supply that was being soaked up by new arrivals and weakness in other states prompting people to move from elsewhere is all underpinning the strength of growth in the two largest states.
"Sydney and Melbourne are in the sweet spot," said Terry Rawnsley, a principal of consultancy SGS Economics & Planning. "Their economies are strong. Their housing markets are providing more stock. At the same time, there are weaknesses in other states, so interstate migrants are flowing to where the jobs and housing are."
But the figures also underline the growing housing and infrastructure challenges of an ageing nation. Ten years earlier, in September 2007, Australia had a similar growth rate of 1.7 per cent. In September 1997, it was 1.1 per cent and the challenge for policy makers then - largely unmet, as Sydney's ongoing housing shortfall shows - was to develop medium-density housing in established suburbs.
But the pattern of growth now - the cohort of people aged 65-plus is growing at more than twice the rate of 18-64-year olds and 0-17-year olds - was also putting pressure on infrastructure such as aged care facilities in a way it never had before, Mr Rawnsley said.
"We know the cities – Sydney and Melbourne especially - are creaking and groaning and straining under this rapid growth," he said. "But the additional people now - their profile and needs are very different to 10 to 15 years ago because of the ageing population coming though."
The pressures were most acute in SA, he said.
"In SA we need more people between 18-64 and we need them sooner rather than later," Mr Rawnsley said.
"We need to be acutely aware of the changing age profile of our city," Ms Turnbull said. "In the western city, the people over 75 will increase quite dramatically – by almost 30 per cent - in the next 18 years. We need to plan cities that are user friendly and liveable for people at all ages and stages of life."
Thursday's figures backed that picture up.
"There are more people leaving NSW for other states and more people travelling to Queensland from other states," Housing Industry Association senior economist Shane Garrett said.
"The foreigners are coming for work and I suspect the locals who are leaving are of retirement age who want to cash in on the high prices locally and use them to buy something in other parts of the country and Queensland is the place they're going in the largest numbers."
Mr Rawnsley agreed, calling it a "conveyor belt".
"You come to Australia and live in an apartment," he said. "You have kids and move to the inner west. You move further out west. Then the kids move out – what do you do with the big house? The older people head off to Queensland cashing in their properties."
NSW jumped 1.57 per cent from a year earlier to have an estimated resident population of 7,895,819.
Queensland's 1.58 per cent annual gain was the quickest in three years and put it at 4,948,697.
Tasmania's population rose 0.63 per cent over the year to September, marking the fastest rate of growth in over six years. The smallest state had a population of 522,042.
The figures also showed that Australia was firmly on track to hit a population of 25 million in coming months.
"According to my estimates, it will be the second of July," Mr Rawnsley said.