The Planet of Cities: Australia and New Zealand cities from 1980 to 2080

Greg Clark, Urbanist

Borane Gille, Head of Cities Innovation, The Business of Cities

Over decades, shifts in population, industry and technology have driven the transformation of cities in Australia and New Zealand. Smaller urban centres that were mainly driving their national economy evolved into increasingly important global hubs. The region is home to 6 of the 20 most liveable cities in the world, and they are all expected to see rapid population growth in the next decade (Figure 1). Intentional planning is essential to ensure these cities retain their liveability advantages as population grows. Planning will also need to address the challenges posed by infrastructure deficits, vulnerability to climate change and rising competition from cities in Asia-Pacific.

Australian and New Zealand cities in 1980

Before 1980, cities like Sydney, Melbourne, Auckland and Wellington were already established as important urban centres, but their economic foundations were relatively narrow, relying heavily on traditional industries.

Sydney and Melbourne were anchored by industries like manufacturing, mining and agriculture. The manufacturing sector was a dominant force, producing goods for both domestic consumption and export. The automotive and textile industries were especially significant in Melbourne, while Sydney was emerging as a global financial centre with growing connections with a global network of capital cities. This expansion of the financial and manufacturing sectors drove large-scale investment in the urban built environment, with office towers, specialised business parks and mixed-use developments breaking ground in Sydney and Melbourne.

Mining played a crucial role in the Australia’s economy. Booms in this sector in the 1970s, early 1980s (and later in the 2000s) enabled cities like Perth and Brisbane to become globally competitive, as multinationals such as BHP expanded their overseas operations.

Similar dynamics were at play in New Zealand’s cities. Auckland, the largest city, was a centre for manufacturing and trade, with a significant portion of its economy tied to agriculture, especially dairy and sheep farming. The capital, Wellington, was primarily a governmental and administrative hub, with its economy revolving around public sector employment and services.

By the late 1980s, access to new global supply chains (Figure 2) and introduction of economic reforms led to the growth of a more services-oriented economy in the whole region. At the same time, manufacturing declined as the most dominant sector. This was coupled with the reinvigoration of Central Business Districts (CBDs) and inner suburbs in Australian main cities, after a previous cycle of depopulation and sprawl. Globalisation and technology advancements started to alter the economic landscape of these cities, with the beginning of a shift towards more diversified economies through globally-oriented industries, particularly in Australia.

 Australian and New Zealand cities now

Nearly nine in ten people in Australia and New Zealand now live in what are among the world’s most liveable cities. Economic diversification has become a hallmark of these urban centres, leading to more resilient and dynamic economies.

Population in Australia’s capital cities have more than doubled in the past 50 years and depopulation in inner cities has reversed as a result of economic transition and densification policies. Melbourne and Sydney have seen the largest population growth and have evolved into global cities with diverse economies. Sydney is among the most connected corporate centres in the Southern Hemisphere and its financial sector is in the top 30 financial centres globally.  Melbourne has also seen a shift to a more diversified economy, with a strong focus on education, healthcare and the creative industries. Melbourne is also known for its vibrant cultural scene and is gradually becoming a hub for research & development.

However, compared to other global cities, Australian cities retain a more leisure and hospitality-oriented economy and have yet to build more productive strengths around innovation and high-value industries. The past five years have also revealed the limits to rapid population growth in Australian cities. Infrastructure investment has not matched population growth, leading to declines in liveability, affordability as well as emerging concerns around resilience and climate change.

Other Australian cities, such as Brisbane and Perth, while still benefiting from resource-based industries, have also seen a change in their economic mix. Brisbane and its wider region have developed a stronghold in the higher education sector, with talent coming to study in its world-class universities. From a mining city, Perth has expanded into technology and renewable energy, preparing for a future where reliance on fossil fuels may diminish.

In New Zealand, Auckland has developed strong sectors in finance, technology and tourism, while still retaining its roots in agriculture and trade. The city is also a hub for creative industries, including film and television production, which have gained international recognition. Wellington, meanwhile, remains the political centre of New Zealand but has also grown its technology and creative sectors. This diversification has not only made their economies more resilient but has also improved the quality of life for residents, offering a wider range of employment opportunities and cultural experiences.

Australian and New Zealand cities towards 2080

Recent estimates show Australia and New Zealand’s populations reaching 40 million and 7 million respectively by the 2060s. The set of challenges ahead present those cities with the imperative to accelerate their transition from a dominant sprawling urban model, towards more future-proof, multi-centre spatial forms.

Multi-city planning. As Australian cities plan for the future, it will be important to determine and optimise where and how to accommodate the additional population growth, and the required physical and governance connections between cities, surrounding towns and new locations. The development of Sydney’s second Central Business District in Parramatta and greater co-ordination between cities as shown in the case of Southeast Queensland are promising signs towards achieving this agenda.

Infrastructure investment. The recent decade of investment is not enough to compensate the deficits in urban and metropolitan transport investment from previous decades and create the capacity for the future. The emergence of multi-centred regions will benefit from capacity increases linked to regional transport infrastructure, both in and between cities. It can also unlock transit-oriented development around stations and contribute to denser, less car-oriented cities.

Climate resilience. Australian capital cities are expected to experience twice as many days above 35ºC by the end of the century. Extreme weather events are also becoming more frequent, pointing to the need for Australia to accelerate its decarbonisation journey and shift to a more balanced energy mix. Overall, New Zealand cities have a lower potential damage risk to property from climate change than Australian cities, but recent floods in Auckland resulted in US$3.4bn in economic losses, highlighting the need for the city to increase resilience.

The future of Australian and New Zealand cities will also depend on the reinvention of ‘the Australian dream’, which is currently based on large single-family owner-occupied homes, and car as the dominant mode of transport. As these cities continue to diversify and innovate, they will need to balance economic growth with sustainable resource management and place leadership, ensuring they remain attractive places to live, work and invest in.