Sydney will eventually "swallow" Wollongong, as residents of the harbour city move away from the CBD, authors of a new report have found.
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Professor Akshay Vij and colleagues from the University of South Australia set out to see whether the pandemic-induced trends of households and businesses moving away from the capital cities were here to stay.
He found that Australia's capital cities will continue to draw in residents, but large regional coastal cities within a commutable distance from a capital city can expect to see an influx of new residents, followed by businesses.
That means Wollongong - which ticks all those boxes - can expect to see more residents arriving for at least the next ten years, Dr Vij said.
"The big cities will continue to get bigger," he said.
"To the point where Sydney ends up swallowing Wollongong and Newcastle."
Dr Vij said this expansion would be driven in two waves, first by those not in the workforce who can more easily uproot themselves from a capital city.
Then, as these new residents spend, businesses and workers will follow to supplement the regional labour force.
During the pandemic, Wollongong already saw an influx of new residents, with the Wollongong CBD the second most popular area for Sydney residents to move to - after Morisset on the Central Coast - between 2020 and 2021, with 787 Sydneysiders making the move south, according to census data.
To see whether these trends would continue, Dr Vij and colleagues surveyed 900 senior managers at business and 3000 households across Australia.
Their results showed that businesses would stay in the capital city CBDs, sometimes paying up to $700 more to rent in a capital city CBD, but households were more able to move, depending on their job.
Sydneysiders most keen to move to Wollongong were workers who had jobs that could be done partially remotely but were required to be on site, with 70 per cent saying they were prepared to move.
This was followed by workers who could work remotely full time but had an office in the Illawarra region.
Moving to Wollongong from Sydney was more attractive than moving from Wollongong to Sydney for all types of workers and those not in the workforce, unlike other regional centres where more would prefer to move from Orange and Canberra to Sydney than vice versa and Bendigo to Melbourne and Mount Gambier to Adelaide.
The findings come as the recently released Intergenerational Report forecasts that capital cities will grow faster than regional areas over the next 40 years but the gap will narrow.
Regional Australia Institute CEO Liz Ritchie said supporting the findings showed governments needed to support the growth of regions with essential infrastructure.
"Lack of housing supply and diversity, chronic labour and skill shortages and poor access to medical services, childcare and aged care services are all holding regional Australia back," she said.
With renters in Wollongong in particular feeling the pain of the country's fastest growing rents, Dr Vij said the data offered some respite, Wollongong would soon return to being more affordable than Sydney, as it had been in the past.
"There's an undersupply of new housing coupled with an unexpected surge in demand, but one would expect those prices to stabilise in the long run," he said.
"I cannot reasonably expect Wollongong in the long run to have higher median real estate prices than neighbourhoods in Sydney."
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