Australia’s largest city, Sydney, is beginning to suffer skilled labour market brain-drain to Melbourne, Brisbane and regional NSW.
Sydney houses Australia’s strongest job market in media, technology and finance. And that job market has been sucking in talent from around Australia and overseas for most of the 21st century. Melbourne is stronger in other areas but Sydney has had overall pre-eminence.
Anecdotally, I have noticed the seeds of change germinating. Now one of Australia’s leading online employment agencies, Indeed, and its economist Callam Pickering have uncovered fascinating data that shows we are looking at the beginnings of a significant skills transfer from the harbour city.
The Indeed/Pickering study shows that despite a strong NSW economy and plenty of job opportunities, a high proportion of Sydneysiders are actively looking for jobs elsewhere, including those with skills most needed in a competitive economy.
About 93,000 of Sydneysiders migrated interstate or to regional NSW in the 2015-16 financial year, according to the Australian Bureau of Statistics. Only 70,000 people moved the other way.
But behind these figures is a much deeper and more disturbing trend, which is measured by the clicks being recorded by STEM (science, technology, engineering and mathematics) jobseekers.
About 9 per cent of clicks from NSW STEM jobseekers are outbound — they’re looking for jobs in other states. Only 6 per cent of clicks for NSW STEM job postings are inbound, i.e. coming from jobseekers living in other states. With the exception of South Australians, STEM jobseekers in NSW are the most likely group to search for work interstate.
Pickering says click behaviour is a good measure of jobseeker sentiment and it offers insights into how those looking for work view the market. Of course, most of those who click don’t actually move.
Australian interstate migration is usually based on economic opportunity and living costs.
NSW and Victoria have had Australia’s best-performing economies, accounting for around three-quarters of employment growth, which will continue to draw jobseekers. But Sydney is at a distinct disadvantage when it comes to living costs.
In my view, there is one simple explanation why most Sydneysiders want to leave — the high property prices and/or rents. Those living in Sydney who are not earning top salaries, or receiving other income, do not enjoy the same living standards as those who live elsewhere in Australia. The exception is people whose funding is boosted by rich parents or an inheritance.
In former years, salaries were rising so any hard times in Sydney were temporary. Now salaries are not rising — so that changes the game, in favour of those in Sydney with access to other wealth sources and those living in the rest of Australia.
In 2015-16, Sydney’s interstate and regional exodus was at its highest level since 2011-12. The biggest gains were had in regional NSW and Melbourne and Brisbane. And the exodus covers both high- and low-skilled workers from NSW.
Pickering puts a new perspective on my recent research into the experience of two couples with combined incomes in the $225,000 to $250,000 range.
All four people have what society would regard as good white-collar career jobs. One couple lives in Sydney and the other in Melbourne. The Melbourne experience could have been duplicated or improved had the couple’s jobs been hosted in Brisbane, Adelaide, Perth or Hobart.
The Sydney couple is currently renting but would like to buy an apartment close to the city but not in the affluent strips. They almost bought a two-bedroom flat on the third floor without a lift or a garage. It would have cost between $1.1 million and $1.2 million.
The Melbourne couple has actually bought a three-bedroom (they’re small bedrooms) apartment in the inner suburb of Carlton. It has much easier access to the city than the Sydney couple’s proposed apartment, and also has a lift and a garage. They bought it for about $650,000 and apartments in the block are still selling at that level.
Neither has parental help so the Melbourne couple are enjoying a much better lifestyle. At the moment there is a glut of apartments in inner Melbourne but that will not last. And in outer Melbourne at the start of 2017 houses were much cheaper than outer Sydney but we are now seeing Melbourne outer suburban prices rising quickly so that gap between outer Sydney and Melbourne is narrowing. Brisbane may be a big winner.
Originally Published: www.theaustralian.com.au