MELBOURNE'S outer suburbs are growing faster than any other area in Australia, part of a record-breaking trend that has seen Melbourne's population closing the gap on Sydney.

The city's outer suburbs are leaving coastal Queensland and Western Australia's mining towns in their dust, as more than 1000 people a week pour into Melbourne's fringe.

New figures from the Bureau of Statistics show that while the boom in overseas immigration cooled off all over Australia in 2009-10, Melbourne was again the centre of Australia's population growth.

Melbourne's growth in the past 9 years equals roughly six Ballarats, three Hobarts and one Gold Coast.

■ In the year to June 2010, Melbourne is estimated to have grown by 79,000 people, or more than 1500 a week. For the ninth consecutive year, Melbourne had the biggest growth of any city in Australia.

■ Since 2001, Melbourne has gained 605,000 new residents, up 17 per cent, rapidly pushing out the urban boundary in every growth corridor. That is far ahead of growth of 447,000 in Sydney, 380,000 in Brisbane, and 303,000 in Perth.

■ For the first time in almost 30 years, Melbourne's population is within 500,000 of Sydney's, and gaining. If the growth rates of 2001-10 continued, Melbourne would overtake Sydney in 2028, when each city would have roughly 5.6 million people. At June 30 last year Sydney had 4.575 million people to Melbourne's 4.077 million.

■No other city in Australia has ever recorded growth of this size. It has strained the city's infrastructure and services, adding to congestion on the roads, delays, overcrowding on public transport and waiting times in hospital emergency wards. Some believe it was a key factor in Labor's unexpected loss at the 2010 state election.

■The four fastest-growing municipalities in Australia in 2009-10 were all on Melbourne's fringe. Wyndham (which includes Werribee), Melton, Whittlesea (South Morang) and Cardinia (Cranbourne) left behind all the boom areas of other states, with their combined populations growing by 33,216 or 7 per cent.

Wyndham alone added 12,600 people last year, matching Victoria's entire population growth at one point during the Kennett government. Since 2001 it has added almost 70,000 people, roughly equal to adding a city the size of Bundaberg to Melbourne's south-west fringe.

Last year its growth in absolute numbers almost matched that of the Gold Coast. It puts pressure on the Baillieu government to press on with the new train line begun by the Brumby government, one of the many big-ticket projects under review.

The fall in arrivals of overseas students cut Melbourne's population growth sharply in 2009-10, from 96,000 a year earlier. But the bureau estimates that growth shrank overwhelmingly in the middle and inner suburbs, where most students live. Growth on the outer fringe barely lost a beat.

In 2009-10, based on the bureau estimates, roughly 68 per cent of the city's new people settled more than 20 kilometres from the GPO. That was a sharp rise from 58 per cent over the previous three years.

The NIMBY (not-in-my-back-yard) syndrome continues to limit redevelopment in inner and middle areas. The blockage of supply has seen house and unit prices soar in inner areas, giving lower-income buyers no choice but to live far out.

Over the nine years since Melbourne replaced Sydney as Australia's growth centre, five in every eight new residents has had to settle more than 20 kilometres from the GPO. Of Melbourne's 4,077,000 people at June 30 last year, roughly 1,814,000, or almost half, lived more than 20 kilometres out.

But the inner circle population has also grown sharply, rising by 74,000 or 30 per cent.

The pace of inner urban growth has slowed in recent years, but with a forest of new apartment towers approved over recent months, it appears set to rebound rapidly.

Victoria's growth dropped to 99,000 in 2009-10, down from a record 120,000 a year earlier. Nearly all that decline was in Melbourne, with regional Victoria accounting for a quarter of the state's population growth.

Planning Minister Matthew Guy said the Baillieu government was acutely aware of infrastructure and housing shortages, and promised strategies early in this term to address the problems.