Victoria's population is being sustained by overseas migration as more people leave for other states than arrive to make a new life here.

For the first time in six years, Victoria suffered a net loss of people interstate, as Melbourne's house prices and stalling job growth deterred arrivals.

While interstate migration turned negative, the Bureau of Statistics estimates that net overseas migration to the state in 2003 jumped by almost 40 per cent. It was Victoria's biggest influx since 1960, when Italians and Greeks made up most of the migrants.

The bureau estimates that the state's population grew by 63,033 or 1.3 per cent last year to just short of 4.95 million. It was Victoria's biggest growth in numbers since 1969, and its fastest growth since 1990.

At that rate, Victoria's population will pass 5 million some time in October.

It reached 1 million in 1887, 2 million in 1945, 3 million in 1962 and 4 million in 1982.

The bureau estimates that Australia added 250,781 people to end the year with 20,008,677.

The nation's population hit 5 million in 1918, 10 million in 1959 and 15 million in 1981.

Victoria made a net loss of 1453 people interstate compared to a net gain of 5481 two years earlier.

NSW lost a net 31,280 people, Queensland gained 37,556 and Tasmania - usually a state of exodus - gained a net 3035 new arrivals as the nation fell in love with its cheap houses.

What Victoria lost to other states it made up with massive gains from other nations. On the bureau's estimates, the state gained a net 36,683 migrants as more settlers, foreign students and other temporary residents arrived than emigrated.

Australia gained a net 132,368 people, almost double the increase in 1997. It was only the fifth time since 1950 that the bureau estimates that migration was the main source of population growth, rather than natural increase.

The bureau's estimate however is sharply at odds with its estimates of the number of people arriving in and leaving Australia.

They indicate that last year just 62,500 more people arrived than left, and in 2002, a mere 19,500.

But there is no doubt that natural increase (the gap between births and deaths) is shrinking. It is down from 142,586 in 1990 to 118,413 last year, and the bureau projects that on current trends, deaths will outnumber births by 2036.