A new Federal Government report shows a national shortfall of more than 200,000 new homes and the "drift to the north" accelerating, with south-east Queensland cities growing far faster than those in New South Wales.
The State of Australian Cities 2011 report also revealed that bicycles are the new black, outselling cars by 2 million units in the decade to 2010.
Launching the report, Infrastructure Minister Anthony Albanese said the figures were an important planning tool.
"It's a matter of getting the planning right; there is obvious pressure on south-east Queensland," he said.
"You can draw a line effectively across the NSW-Queensland border and the growth tends to be largest north of that."
The study also shows that housing shortages exist across the country and housing affordability appears to be keeping young people in the family home for longer.
City dwellers are increasingly dispensing with cars, turning to public transport, walking and cycling to get around.
About 21 per cent of population growth in Sydney occurred in the inner city over the past decade, significantly more than in other capital cities - and Melbourne's overall rate of population growth has outstripped Sydney's.
The number of people living in Melbourne has risen by 600,000 people over the past decade, while Sydney's population grew by less than 450,000.
Mr Albanese says he plans to use the document for policy development, advocating infill or higher-density city development and warning states their infrastructure funding will be tied to city planning.
Audio: Housing Affordability Altering Demography (The World Today)
"It emphasises the importance of having housing affordability, of having proper planning, of ensuring not just that there's new release of land but also that there's appropriate infill development," he said.
"That's particularly important if we're going to reduce our carbon footprint."
Displaced
Advocates for lower-cost housing say the report underscores problems for many Australians.
Sarah Toohey from Australians for Affordable Housing says a lack of housing in major cities is impacting on regional areas.
"So the ripple out from the capital cities means that the people on higher incomes are heading out into regional centres and then displacing people in those towns as well," she said.
The report is the second of its kind produced by the Government's Infrastructure Australia.
It also showed people are using less electricity, with consumption down by 1.2 per cent in the past year which coincides with rapid increases in power charges.
Since 2006, there has been a marked improvement in the recycling of waste, although there is a large variation between cities. Canberra and Adelaide recycle 70 per cent of their waste, while Perth only recycles 40 per cent.