Melbourne has been named the world’s most liveable city for the fourth consecutive year – just as a powerful population surge positions it to overtake Sydney as Australia’s largest city within the next decade.
New figures reveal Melbourne added more than 105,000 residents in 2024-25, significantly outpacing Sydney’s growth of around 75,000 and rapidly narrowing the population gap between the two rival cities.
If current trends continue, Melbourne is expected to claim the top spot by around 2032.
The surge, as per ABS, is being driven largely by overseas migration and a strong rebound in global travel.
In January 2026 alone, Australia recorded more than 2.5 million total arrivals, a 5.7 per cent increase year-on-year. Short-term resident returns rose sharply by 7.8 per cent to 1.66 million, while short-term visitor arrivals reached more than 716,000.
Victoria continues to attract a significant share of this influx, with more than 202,000 short-term visitors nominating the state as their destination in January – highlighting Melbourne’s growing appeal as a hub for migrants, international students and skilled workers.
The broader trend reflects a post-pandemic recovery in global mobility, with travel flows approaching – and in some cases exceeding – pre-COVID levels.
Key source countries include New Zealand, the United Kingdom and China, while Australians are increasingly returning from destinations such as Indonesia and Japan.
At the same time, cost-of-living pressures in Sydney are accelerating the shift. Higher inflation and rising household expenses are making Melbourne a more attractive alternative for many.
NSW Liberal Shadow Treasurer Scott Farlow warned that families are under mounting strain, saying,
“Families are being squeezed at the supermarket, at the petrol pump and on their electricity bills.”
He added that the current inflation environment is “bad news for families” and could worsen further amid global uncertainty, underscoring the economic pressures facing households in New South Wales.
Historically, Melbourne has rivalled Sydney closely – and even surpassed it in population during the 19th century. Now, with stronger migration flows, lower inflation and continued global appeal, the balance appears to be shifting once again.
If sustained, Melbourne’s combination of liveability, opportunity and rapid population growth could soon see it reclaim the title of Australia’s largest city – marking a defining moment in the nation’s urban evolution.
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