Melbourne

Melbourne was founded twice in one year by rival expeditions racing to claim the same river mouth—and that competitive origin story echoes through two centuries of rivalry with Sydney. In June 1835, John Batman sailed from Tasmania and declared of the Yarra River site: 'This will be the place for a village.' He called it Batmania. But before he could return with settlers, John Pascoe Fawkner landed his party in August 1835 and began building. Batman's group arrived three days later to find Fawkner already in possession. That scramble for first-mover advantage set the pattern: Melbourne would grow through boom-and-bust cycles that Sydney's steadier harbour economy never quite matched.

The Kulin nation peoples had inhabited the Port Phillip region for at least 40,000 years before Europeans arrived. Batman's treaty with local elders—offering blankets, tools, and food for 600,000 acres—was the only attempt by a European colonist to negotiate rather than simply claim. The Sydney government declared it void within months, but within a year 177 settlers and 26,000 sheep had arrived, and the government had to accept the inevitable. By 1851, Melbourne's population reached 29,000.

Then gold transformed everything. When deposits were found at Ballarat and Bendigo in 1851, Melbourne became the gateway to the world's richest goldfields. Victoria produced over a third of global gold output in the 1850s. Melbourne's population exploded from 29,000 to 500,000 in a decade—the fastest urban growth the 19th century would see anywhere. Tent cities mushroomed in South Melbourne; Chinatowns formed; timber shacks gave way to stone and brick. By the 1880s, 'Marvellous Melbourne' rivalled London and Paris in per capita wealth, and the city built the institutions to match: the State Library (1854), University of Melbourne (1854), Parliament House (1856). The manufacturing base grew strong enough that when Sydney and Melbourne competed for the role of national capital at Federation in 1901, neither would yield—hence Canberra, built on neutral ground between them.

Today Melbourne is home to 4.9 million people, Australia's cultural capital and consistently ranked among the world's most liveable cities (fourth globally in 2025). The University of Melbourne ranks in the global top 50; the city hosts Australia's largest concentration of higher education students. Where Sydney became the financial capital, Melbourne built an economy around professional services, education, healthcare, and creative industries. Manufacturing has declined sharply—the auto industry that once employed tens of thousands is gone, and the sector contracted 2.6% in 2024 alone—but the pivot toward knowledge work continues. Tech companies, biomedical research, and arts and media now anchor the economy.

By 2026, Melbourne's advantage lies precisely in what gold rush wealth built: cultural infrastructure, universities, and quality of life that attract the knowledge workers every city now competes for. The rivalry with Sydney has shifted from manufacturing versus finance to liveability versus opportunity. Melbourne's bet is that in a remote-work world, people will choose where to live first and where to work second.