Victoria's population is booming as NSW residents flood into their southern neighbour by the tens of thousands. The latest figures from the Bureau of Statistics show the strongest population growth in Victoria since 1960, helped by a net migration of 5000 Australians moving to Victoria from other states in the first three months of 2017.

Of those, 2000 extra NSW residents moved permanently towards the Yarra, as rising costs of living, house prices and perceived job opportunities weighed on the minds of them and the 8000 that preceded them during the past year.

Victoria's 2.4 per cent population growth rate far outstrips its nearest competitors – the ACT at 1.8 per cent, and NSW at 1.6 per cent.

Nationally, when you include overseas migration and the birth rate Australia recorded its biggest quarterly rise in population in nine years, according to Commsec economist Craig James.

There were 302,500 babies born in the past year, just short of the record growth of 312,200 babies in 2012.

"In some regions, it is natural increase, more babies being born [less the number of deaths] that is driving population growth. In other regions it is immigration," he said.

"But overall the stronger rate of population growth is boosting spending, demand for infrastructure, demand for homes, and overall economic growth."

While Victoria's booming population is driving its economic growth, it is not necessarily true the other way around.

Population growth has naturally driven higher spending and demand for property because there are more people buying items and building houses, but the state has gained little benefit from the mining boom. At the same time, the high Australian dollar has hastened the decline of manufacturing and hampered tourism.

A Fairfax Media analysis of Bureau of Statistics figures in July showed income per person in Victoria rose just 0.8 per cent from mid-2008 until the end of the 2016 financial year. Australia as a whole grew more than 7 per cent.

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Source: The Age