More fringe dwellers as Melbourne population reaches 4.25m The Melbourne city skyline from a suburb. MELBOURNE's population continues to boom as lack of housing affordability pushes more young families to the city fringe. New ABS figures show the city is growing by 1500 people a week, with outer suburbs such as South Morang, Point Cook and Tarneit recording the biggest increases in the nation. Melbourne added 77,200 people in the year to June 2012 - the most of any capital city and an increase equal to the size of the Latrobe Valley. Fuelled mainly by overseas migration, the city's population has reached 4.25 million, only 400,000 short of Sydney's, said the ABS report Regional Population Growth Australia 2011-12. It revealed that South Morang grew by a massive 15 per cent or almost 6000 people, while Point Cook added 4100, Tarneit grew by 3600 and Craigieburn-Mickleham by 2900. Dr Bob Birrell, director of Monash University's Centre for Population and Urban Research, said that the continuing growth on the city fringe reflected Melbourne's housing affordability crisis for young families. "Fringe housing is the only detached housing that's affordable for the rapidly growing number of young households in the city," he said. Planning Minister Matthew Guy said that Melbourne was facing significant expansion, with only eight council areas accounting for 70 per cent of the city's residential growth. "It's a huge challenge for government to manage this," he said. Inner city Melbourne also recorded huge growth, with Southbank soaring by 11 per cent to 13,600 people.