Not strictly true. The relevant number is population density as lived. Australia is really big with large empty areas, but it has huge concentrations of people on the coasts in urbanized, developed environments.
I've been a city boy all my life, but we really need to stop treating regional and rural Australia as second-class citizens when it comes to these kinds of things.
The other thing you point out is interesting - the urbanisation rate of Australia. It's in the top 5 'big' countries, sitting at 90% - above France at 85%, and the US/UK at 80%. It kinda goes against the mythical image we have of ourselves, the rugged outback-seeker. Sod the wide brown land, give us tarmac!