Cost of living in Australia
Cost of living in Australia
Choosing where to live in Australia
Australian Economy
There are lots of reasons to live in Australia, with the attractions being many-sun, space, surfing, lifestyle and low cost of living in Australia as well as a growing modern economy which has been one of the strongest in the world over the past decade.
This is due to a combination of things: a skilled and flexible workforce, strong economic management and a competitive dynamic private sector that has enabled Australia to demonstrate great resilience in a time of huge global economic slowdown.
Australia has been able to maintain a low inflation rate, which in turn means low interest rates. Australia’s government net debt is also significantly lower than that in Europe, Japan and the United States a well as being amongst the lowest in the Organisation for Economic Co-operation and Development (OECD).
Australian Workforce
There are approximately 38% of Australians who work in professional or technical jobs, as a manager or administrator. Around 42% of the workforce has a university degree, diploma or trade qualification. Australia’s higher education enrolment rate, at around 80%, is one of the highest in the world-third behind only Canada and the United States.
Australian Currency
Australia’s currency is decimal, with the dollar as the basic unit. There are 100 cents in one dollar ($1). Notes come in $5, $10, $20, $50 and $100 denominations and coins in 5c, 10c, 20c, 50c, $1 and $2. All major credit cards and traveller’s cheques are widely accepted around Australia.
Generally banks are open Monday to Thursday from 9.30am to 4.30pm, Friday from 9.30am to 5.00pm. Some banks now are open Saturday mornings until 12pm
Cost of living in Australia Surveys
Economist Intelligence Unit (EIU) Worldwide Cost of Living Survey This survey enables human resource line managers and expatriate executives to compare the cost of living in over 130 cities in nearly 90 countries and calculate fair compensation policies for relocating employees. In 2005 and 2006 cost of living in Australian cities ranked as follows:
Source: Economist Intelligence Unit – Worldwide Cost of Living Survey, 2005-2006.
Sydney remained the highest cost of living in Australia and its rank jumped from 25th in Mar 2005 to 16th in Jan 2006. Similarly, Melbourne’s cost of living has risen from 28th to 19th during the same period followed by cost of living in Brisbane, Perth and Adelaide with similar trends.
Mercer Human Resource Consulting – Cost of Living Survey annually ranks 144 cities using their cost of living index. The index is calculated by comparing the cost of more than 200 items including housing, food, clothing, transport and entertainment.
The 2006 index indicates that Australian cities are still among the cheapest, yet with the highest quality of living.
Source: Mercer Human Resource Consulting – Cost of Living Survey, 2001-2006
(March survey comparisons).
Cost of Living – Sydney, Melbourne, Brisbane
Source: Mercer Human Resource Consulting – Cost of Living Survey, 2001-2006
(March survey comparisons).
Mercer’s Australia and New Zealand Regional Differentials Mercer’s Australia and New Zealand Regional Differentials 2006/2007 compares both State Salary Differentials and Cost of Living in Australian State and Territory Capital Cities.
The report shows NSW as the state with the highest paying salaries with Western Australia following in second place, behind NSW.
Queensland and South Australia are hot on the heels of Western Australia, also increasing their position against the general market with South Australia being last with the lowest base salary.
Victoria has seen a decline in its relative salary position: in 2005 Victorian wages were in line with the NGM median and are now 1% below the national general market.
Rob Knox, Head of Human Capital Product Solutions at Mercer stated that “The resources boom and resulting skills shortage have had a direct impact on wages in Western Australia, Queensland and South Australia. We’re seeing many organisations offer premium rates plus above national average salary increases, in particular to senior and specialist staff.”
State Salary Differentials and Cost of Living – Australian State Capital Cities
Source: Mercer’s Australia and New Zealand Regional Differentials 2006/2007.
Example of State Salary Differential:
Barnabas Ltd, a manufacturing company, has a warehouse manager position. If this position attracted a base salary of $68,000 nationally, Barnabas could expect to pay $67,320 in base salary if this position was located in Victoria ($68,000 – [$68,000 x 1%]) = $67,320) and $70,040 ($68,000 + [$68,000 x 3%]) = $70,040) if this position was advertised in NSW.
As well as commanding increased wages, employees in Perth, Brisbane and Adelaide currently have the added bonus of lower costs of living than in Sydney and Melbourne.
Mercer’s report compares the cost of Living across Australia’s major cities, using Sydney, the most expensive city, as the base point. The study shows that it is cheaper to live in Perth than it is in Sydney with the cost of living estimated to be 6% lower. In Melbourne the cost of living is estimated to be 3% lower than Sydney.
“Rental rates in both Perth and Brisbane have been catching up dramatically to those in Sydney in the past four years, indicating the resources boom is also driving living costs higher,” Knox says. “We should soon begin to see the disparity between costs of living and wages in the high paying states such as Western Australia even out, particularly as the states look for strategies to manage rapid salary growth.”
Australia’s Housing Market
Demographia – International Housing Affordability Survey
Demographia, a U.S.-based market research company regularly reviews housing markets in six major industrialised countries. Their latest housing affordability study, the 3rd Annual Demographia International Housing Affordability Survey covers 159 major markets in six nations which include Australia, Canada, Ireland, New Zealand, the United Kingdom and the United States.
The report suggests that housing affordability in Australian cities is now amongst the worst in the world. Demographia found that seven (Sydney, Perth, Hobart, Melbourne, Adelaide, Brisbane, Darwin) of the eight housing markets in Australia are rated as “severely unaffordable”, which means that their median multiples were in excess of 5.1. Canberra was rated as “seriously unaffordable” with a rating of 4.9.
Demographia: Housing Affordability Ratings
Source: Demographia – 3rd Annual International Housing Affordability Survey 2007
(Data for 3rd Qtr 2006).
Demographia: Most Unaffordable Housing Markets – City Level (out of 159 cities)
Sources: Demographia – 3rd Annual International Housing Affordability Survey 2007
(Data for 3rd Qtr 2006).
For Australian cost of living property prices and rental costs throughout Australia go to:
Real Estate Institute of Australia
Groceries
Australia is famous for its high-quality fresh locally produced food products.
To give you an idea of cost of living food prices in Australia visit the two biggest nationwide food retailers online grocery:
Woolworths or Coles.
Department stores
To get an idea of the cost of items such as towels, sheets, kitchenware, toiletries and clothing visit the websites of department stores David Jones or Myer, Kmart and Target.
Petrol (Gasoline)
The Australian Automobile Association compiles figures on petrol prices and updates them regularly.
Cars
For information on new and second-hand car prices and to see the range of manufacturers who sell in the Australian market look at www.drive.com.au.
Calculators
Use www.ozforex.com.au or www.yourmortgage.com.au calculators to get an idea of the cost living in Australia mortgage costs and currency exchange rates.
Source: Melbourne City Research City Benchmarking and Liveability May 2007
Love the advice. Thank you.
Very good & elaborative information.
good info, but could not compare to my homeland Iran. housing in Iran is also unaffordable.
Very good & elaborative information. I love this advice.thank you………