Millennials are flocking back to the regions in their thousands

New population data shows the reverse is now happening.

Millennials, aged 25-39 years, are returning to regional areas in their thousands.

This surge of millennials leaving Australia's capital cities for country communities is helping drive a regional renaissance, according to the Regional Australia Institute.

The institute chief executive Liz Ritchie said a recent deep dive into Census data found an extra 54,000 millennials headed for the regions during 2016-2021 compared with the previous Census period (2011-2016).

"For so many years we've heard stories about young people from regional communities leaving the country to undergo further study and take up jobs in the cities, never to return," she said.

"But today we can debunk that myth.

"This data shows there's been a remarkable turnaround during the last Census, with a net loss of just over 37,000 millennials in the regions in 2011-2016, to a net gain of more than 57,000 in 2016-2021."

Ms Ritchie said a similar story unfolded amongst the overseas-born population, with regional Australia doubling its net gain of this demographic across the two Census periods.

"The data also shows a significant increase in the number of millennials and overseas-born residents relocating from urban to regional areas," she said.

"This is a dynamic change in Australia's demographic landscape," Ms Ritchie said.

The chief reason behind the reversal of the population flow has been a strong jobs market in country areas, as well as the the lifestyle benefits like the reduced cost of living.

For instance in Victoria, the regional unemployment rate is at a record low..

Australian Bureau of Statistics labour force figures show Victoria's regional unemployment rate has fallen to 2.8 per cent - the lowest ever in the state.

RAI research also found regional Australia saw a significant increase in net migration from capital cities of 166,000 people - almost triple the net gain of the previous Census period.

Ms Ritchie said between 2016-2021 more than 600,000 metro Australians packed up their homes and embarked on a new life in the country - 120,000 more than during the previous Census period.

Sydney and Melbourne were the largest net exporters of people to regional Australia, with a net loss to the regions of more than 110,000 and almost 82,000 respectively.

Ms Ritchie said this shift in population could have profound implications for regional Australia.

"Millennials have a higher propensity to move to more remote areas than the general public," she said.

Local government areas such as Dungog (NSW), Loddon (Victoria), Blackall Tambo (Qld), Tumby Bay (SA) and Chapman Valley (WA) all saw significant net migration rates for the millennial cohort.

Ms Ritchie said regional leaders have told the RAI, the acceleration in population has strained existing social and physical infrastructure. Substantial investment is needed in areas like housing, healthcare, and schools.

Whilst the pandemic was a catalyst for capital to regional migration, research shows increased movement between cities and country areas is a trend that's been building for a decade.