The cost of living in Australia
Moving to Australia: A cost guide.
With our world famous beaches and sporting events, Australia is one of best countries to live in, and if you’re considering relocating to Australia, you are making a top choice. However, you will have to take into account our cost of living. After all, Australia has continued to top the charts as the most expensive country in the world for the past four years.
Housing costs have continued to climb and the country’s geographical location and features means that you can expect to pay extra for essential goods and services. Despite this, Australians do get paid higher in general and some Australian capital cities are significantly more affordable than others. Read on for a basic guide on how you can prepare yourself financially for the big move.
The most expensive country in the world
The blessing of having one of the world’s most famous natural environments comes at a cost. With 80% of Australians living in a coastal region, we have to pay for what we are getting.
In 2015, Australia was crowned the most costly country in the world by Deutsche Bank. Its annual world Consumer Price Index (CPI) illustrates that living in Australia is 12% more expensive than living in the United States. In particular, we are paying a hefty premium for our food, drinks, clothing and travel. Our CPI has continued to climb every year in the last decade. In fact, the figure has risen to be more than 6 times higher than what it was in the 1970s, with housing now almost 7 times higher and transport now almost 8 times higher.
Australia has become a little cheaper this year due to the weakening Australian dollar. However, if you’re going be earning a salary in Australia, you will still be paying a premium for living here.
If you are interested in either Sydney or Melbourne, you will be moving into either the 5th or the 8th most expensive city in the world, respectively, and you will be paying more for public transport than any other city in the world. The fabulous scenery in Sydney will provide you with plenty of opportunities for romance. Yet, on average, you will also be paying more for a date in Sydney than anywhere else.
Living down under does have a few price perks, though; we have cheap gym memberships and, ironically, cheap Big Macs. Overall, the living expenses in Australia are almost double of that in India.
Why is the cost so high?
Fundamentally, the cost of living in Australia is deemed to be expensive due to Australia’s unique geographic characteristics. Very simply put, Australia’s population is very small in comparison to the enormous size of its land. As a result, demand is lower and freight and transportation costs are considerably higher.
However, do keep in mind that the standard cost of living is also a result of Australia’s “high wage cycle”. Our minimum wage is almost double that of the United States, and overall Australians are getting high pay. Accordingly, the costs for goods and services are higher, and so consumers are charged more. You are paying more, but you are also getting paid more. The Numbeo survey shows that countries that have a higher cost of living also have an equally high purchasing power, compared to less expensive countries. Also, the stringent nature of Australia’s planning and strata regulation makes commercial rent higher for every single shop.
Property is particularly expensive in Australia, with a median hose price of almost $500,000. This is because our real estate laws mostly favour the seller, and, more recently, the domestic real estate market has seen a large influx of overseas investment.
What will my weekly budget look like?
If you are moving to Australia, your weekly budget should look similar to the one detailed below. Bear in mind that these are rough estimates and that, as mentioned above, your budget will depend upon the capital city you ultimately choose. Of course, your budget will also differ depending your lifestyle choices.
If you are coming to Australia with your partner and two children:
Home and accommodation
Rent or mortgage - $450
Sum of council fees - $25
Utilities (including internet) - $70
Insurance - $20
Food and consumption
Groceries - $300
Alcohol - $50
Eating out once a week - $80
Clothing and other shopping - $100
Entertainment and recreation
Weekly movie night - $70
Weekly pub night - $40
Novelty and gifts - $50
Sports club membership - $20
Scouts membership - $20
Primary school (public) - $5
Secondary school (public) - $10
Petrol - $40
Public transport - $105
Total cost per week
You can see from the above that you can expect your family’s living expenses to be approximately $75,660 per year. If you are a skilled expat, your gross annual salary will be sufficient to provide for your family.
The salaries for Australian professionals are relatively high, with industries such as accounting, financial services, engineering, legal and medical paying more than $70,000 per annum.
What are my options?
Living in Australia is expensive, but it does depend on where in Australia you choose to live. The good news is that the cost of living in some capital cities is significantly lower than others. For example, living in Adelaide is almost 20% cheaper than living in Sydney or Melbourne, and if you are willing to move further out to non-capital cities and regions, then living expenses will further decrease. This is demonstrated through the following table, which compares the average monthly costs of a one-bedroom apartment outside of the city centre for different capital cities:
Average cost of renting a one-bedroom apartment outside of the city centre, per month. Percentage of the cost of a one-bedroom apartment in Sydney
For a more in depth analysis of the climate, employment, cultural and other characteristics of Australia’s capital cities, read through the finder.com.au guide on Australia’s capital cities to work out which city will suit you best.
Top tips for prospective expats
Australia is expensive overall
Unfortunately, there’s no better way to put this. If you want to live in Australia, you should expect to pay top bucks. However, this will be somewhat offset by your higher salary. Be mentally prepared so there are no nasty surprises when you step off the plane.
Choose a city or region that suits you
Australia is a land full of diversity, even across its many cities and regions. A few hours of interstate travelling may take you to a completely different world. Australia’s capital cities each have varying costs of living, employment rates, major industries, culture and environments. Do a little bit of research to ensure that your ultimate destination suits your needs and lifestyle.
Carefully plan your finances
Australians are not the best at seeking financial advice. In fact, only 20% of them see a financial planner. Despite this, its highly recommend that you keep a keen eye on your finances, especially if you are receiving income or financial support from overseas.
Use the resources available to you
Australia is a highly multicultural country. The government and several not-for-profit organisations offer plenty of resources to aid guests and newcomers.
Arrive with enough money to settle
To cope with Australia’s high living expenses whilst finding a job, new expats are recommended to arrive with at least $2,000 and have access to another $3,000.
Consider cultural pockets
Moving to a new country can be an intimidating experience at first, and you may want to live near fellow expats from your home country. You will be able to find many “cultural pockets” in bigger capital cities such as Sydney, Melbourne and Brisbane.
Great diversity of weather
Australia’s capital cities are scattered all over the enormous continent, meaning that each offers their own unique weather! Queensland is nicknamed the “sunshine state”, Sydney is known for its chilly winters and Melbourne is known for its notorious daily weather swings. Again, ensure that you pick a location that suits your lifestyle and preferences.