Australia Faces Historic Low Birth Rate as Population Growth Cools
Australia is on the cusp of a significant demographic shift, with startling new figures indicating a historic low in the nation’s birth rate and a cooling of overall population growth. The latest projections suggest fewer couples are choosing to have children, a trend that will have profound implications for the country’s economy, housing market, and essential services over the coming decades.
The 2025 Population Statement, released by the Centre for Population, forecasts a sharp decline in the fertility rate. It anticipates the rate to fall to a mere 1.42 children per woman in the 2025-26 period. While a slight recovery is projected, reaching 1.62 children per woman by 2031-32, these figures remain significantly below the replacement rate of 2.1 children per woman. Australia has not met this replacement level for nearly five decades, highlighting a persistent decline in birth rates.
The Centre for Population’s analysis paints a picture of sweeping demographic change that will reshape Australia’s future. The nation’s population recently surpassed 27.5 million, a milestone broadly in line with previous projections. However, the pace of growth has decelerated considerably, partly due to a dip in net overseas migration.
New forecasts now predict Australia’s population will reach 31.5 million by 2035-36. This figure is approximately 150,000 fewer people than was projected in the previous year’s Statement, underscoring the impact of the declining birth rate and altered migration patterns.
Nick Latimer, Executive Director of the Centre for Population, emphasised the critical importance of these findings for long-term national planning. “Population changes over the next 40 years will be a major influence on Australia’s economy and society,” Latimer stated. “The 2025 Population Statement provides an important evidence base on Australia’s population today and what we expect will happen in the coming years.”
Understanding Fertility Trends
For the first time, the Centre has released detailed analysis examining fertility intentions and the increasing reliance on medically assisted reproduction. Latimer noted that this trend has intensified public discourse. “As fertility has declined around the world, it has been of growing interest in public policy debate,” he commented. “Fertility has also been a major focus for the Centre for Population this year.”
Migration Dynamics and Future Outlook
Migration remains a volatile factor, particularly in the wake of disruptions caused by the COVID-19 pandemic. Since the projections were finalised, updated data from the Australian Bureau of Statistics revealed net overseas migration at 306,000 for 2024-25. This figure is marginally lower than the Statement’s estimate of 310,000.
Latimer cautioned that uncertainty continues to loom over migration forecasts. “Forecasting net overseas migration has been challenging since the Covid pandemic,” he explained. “Although some aspects of migration have begun to return to more usual patterns, significant uncertainty remains. From 2025-26, net overseas migration is expected to be largely in line with the forecasts in the 2024 Population Statement.”
The Australian Government’s approach to migration is focused on stabilising the system and aligning it with national priorities. Treasurer Jim Chalmers highlighted that the Albanese Government’s Migration Strategy aims to ensure the migration system serves the national interest. He noted the recent decline in migration to 306,000 in 2024-25, which is close to half the post-COVID peak and lower than anticipated due to fewer temporary arrivals.
Government Support for Families
In response to the declining birth rates, Treasurer Chalmers affirmed the government’s commitment to supporting families who wish to have children. “The Government is rolling out policies to ease pressure on families and make it easier for people to have children if they want to, including by taking the next steps in building a universal early education and care system and expanding and enhancing paid parental leave,” he stated.
An Ageing Population
Beyond birth rates, the report also highlights that Australia’s population is ageing at an accelerated pace, although not as dramatically as was seen in the 1990s. By 2035-36, women are projected to have a life expectancy of 87.1 years, and men 83.4 years. The median age of the population is expected to rise by 1.8 years to 40.2.
This demographic shift carries significant budgetary implications. Treasurer Chalmers identified population ageing as one of the five major forces reshaping Australia’s economy. “Population ageing will continue to drive demand for health care services and aged care, placing greater pressure on the budget,” he warned.
Regional Growth Disparities and Urbanisation
Population growth is anticipated to vary significantly across Australia’s states and territories. Western Australia is projected to lead with a growth rate of 1.8 per cent, while Tasmania is forecast to experience a much slower growth of just 0.1 per cent.
Furthermore, urbanisation is expected to intensify. By 2065-66, it is predicted that 72 per cent of Australians will reside in capital cities, an increase from the current figure of 68 per cent. Long-range forecasts suggest that Sydney and Melbourne are on track to reach populations of 8 million residents by 2050, and potentially surpass this mark in the late 2050s.
