New research from economic research firm e61 Institute shows that millennials (those born between 1981 and 1996) have been leaving Sydney in search of housing affordability over the past 20 years.
The report shows that those in their 30s are most likely to pack up and move somewhere more affordable.
Sydney has lost about 0.5 per cent of its population to regional NSW and other capital cities each year over the past 20 years, while its population size has been maintained by international migration.
Elyse Dwyer, a pre-doctoral research analyst at the e61 Institute, said housing affordability was the main reason for households leaving Sydney.
"Our research has found that people are leaving areas where house prices are rising fastest," she said.
For every extra percentage point of house price growth in an area in the five years to 2016, 0.2 per cent of the population left in the following five years.
Notably, people in their 30s left at the fastest rate, and young families in this age group tend to need larger homes. Similarly, people in their 40s are leaving Sydney at a fairly rapid rate - probably for the same reason - and we also see people in their 60s leaving Sydney at a rapid rate, which may be related to tree-changing and sea-changing retirees.
Ms Dwyer said this pattern was seen long before the pandemic and only occurred in Sydney.
The study found that most people leaving Sydney chose coastal centres such as Wollongong and Newcastle that were within commuting distance of Sydney and less expensive.
Ms Dwyer said other large capital cities were not experiencing a similar exodus.
These trends suggest large population movements are a side effect of housing affordability issues, she said.
Young people are leaving Sydney because of a lack of suitable housing. Population movements are an unintended consequence of the housing shortage and could have a negative impact on Sydney's future.
In essence, housing affordability is a key issue that needs to be addressed if we are to ensure that families remain in Sydney.
