Sydney looks set to lose its title as Australia's biggest city if the latest growth trend continues, a new report revealed.

According to KPMG's Population Growth Report 2007, Melbourne is drawing in nearly double the population growth attracted in Sydney, with 62,306 added in the months to June 2006 compared to Sydney's 36,823. This equates to 1.7% growth to 3.74 million - bridging the population gap to only 540,000 residents.

Bernard Salt, demographer and partner with KPMG said that if the current growth rates continue, Melbourne would overtake Sydney as Australia's largest city in 2028.

Gold Coast defended its position as the fastest growing area in the country with a net population increase of 17,374 over the past 12 months to June 2006. Sea-changers have also flocked into other Queensland coastal regions which helped seven of its coastal towns make it to the top ten fastest growing towns in Australia.

The resource boom in Perth and Adelaide had attracted a large number of new residents with Perth gaining 2.2% - the fastest rate of population growth among state capitals whilst Adelaide's population climbed by 11,542.

Salt also found that Australians are leaving the suburban life in droves and are moving in as close to the city centre as possible. Over the 12 months ending June 2006, more than 7,000 people moved into the Melbourne CBD, 6,800 into Sydney and 6,300 into Brisbane in order to avoid long commute to work.

This is the first time in 18 years that the number of people moving downtown outnumbered those who are heading to the leading growth areas in the outer suburbs and parts of the beach.

Salt said the great Aussie dream of owning a big house in the suburbs may soon be a thing of the past. "The sea-change shift continues to grow strongly, but the central core of our largest cities is emerging as a growth area that now competes with the outer suburbs and with parts of the beach as the preferred destination for Australians on the move," he said.