- Australia remains one of the world’s more expensive places to live, with housing costs continuing to put pressure on household budgets.
- Sydney, Melbourne and Brisbane compare favourably with major global cities.
- Higher Australian wages help offset the high cost of living.
While Australians generally enjoy strong wages and a high standard of living, it does come with trade-offs. Rising housing, rental and everyday household costs continue to put pressure on budgets.
Here’s something many Aussies are very familiar with: the cost of putting a roof over our heads is a key factor why the country feels expensive to live in. And several sets of data confirm this (you are not imagining things!).
The OECD recently highlighted housing affordability as one of Australia’s key economic challenges, despite the country’s comparatively high living standards.
See also: Australian Home Ownership and Rent Statistics
The cost of living in Australia
Australia is expensive by global standards, particularly when it comes to housing. In addition to that, other factors like day-to-day expenses further stretch an everyday Aussie’s budget.
Cost of housing
For most Australians, housing is the single biggest household expense. Whether renting or servicing a mortgage, housing costs have become a major source of financial pressure.
A household with a home loan can be set back by a few thousand dollars every month in repayments alone. And it’s not as if what your lender is due is the only cost of owning a home, you have to account for a laundry list of other expenses too.
Use Savings.com.au’s Mortgage Repayment Calculator to get an estimate of your monthly home loan repayments.
Renters don’t have it any easier. National rents have increased to the point where recent data shows Australian households are spending more than 30% of their income on rent, which is a commonly used indicator of housing stress.
Cost of daily essentials
Day-to-day expenses such as groceries, utilities, and transport also play an important role in determining how affordable or expensive Australia feels.
While the country benefits from a strong domestic agriculture sector, grocery prices can fluctuate due to various factors (e.g. weather, supply chain disruptions, global commodity prices). And fresh produce, meat, dairy and pantry staples typically account for a substantial share of recurring household expenses.
Check the prices of common household items using Savings.com.au’s Grocery Price Index
Utility bills including electricity, gas, water and internet services also form a significant portion of monthly household spending. Energy prices can vary depending on location, usage habits and market conditions.
Transport costs also have a major influence on affordability. Australians living in inner-city areas may rely on public transport, while those in suburban and regional locations often depend on private vehicles, making fuel, rego, insurance and maintenance important budget considerations.
How does the cost of living in Australia compare globally?
Every day it seems like there’s a new headline about how expensive it is to live in Australia, particularly the capital cities. More specifically Sydney and Melbourne.
But how does it actually stack up globally? If you’re looking to justify whinging about how expensive everything is, you might want to look away now.
Need somewhere to store cash and earn interest? The table below features savings accounts with some of the highest interest rates on the market.
If you’re planning to move to, say, London, and want to see how far your dollar – or pound sterling goes – Insurer Budget Direct has a super handy tool. It compares everything from wages to rent, utilities, a pair of jeans and a movie ticket.
If you thought Sydney was expensive, think again.
Cost of living: Sydney (AU) vs London (UK)
The average monthly after-tax salary in London is about $7,051, higher compared to Sydney’s $6,186. While wages are higher, living in London is also more expensive than in Sydney.
- Rent prices in London are 34.16% higher than in Sydney
- Consumer prices in London are 8.45% higher than in Sydney
- Grocery prices in London are 19.42% lower than in Sydney
- Restaurant prices in London are 32.97% higher than in Sydney
Where London wins out is in the grocery department, but everything else pretty much goes to Sydney.
Cost of living: Sydney (AU) vs Los Angeles (USA)
The average monthly after-tax salary in Los Angeles is about $7,667, higher compared to Sydney’s $6,186. However, living costs in Los Angeles is also higher than in Sydney.
- Rent prices in Los Angeles are 23.36% higher than in Sydney
- Consumer prices in Los Angeles are 11.02% higher than in Sydney
- Grocery prices in Los Angeles are 7.44% higher than in Sydney
- Restaurant prices in Los Angeles are 45.41% higher than in Sydney
Overall, the cost of living in LA is higher than in Sydney. Going to a restaurant alone can cost you nearly half more of what you’d pay here.
Cost of living: Melbourne (AU) vs New York (USA)
Some people compare Melbourne to New York City, at least in some aspects. Because if you look at the cost of living between the two, it’s pretty obvious living in the city that never sleeps might give an average Aussie some sleepless nights.
- Rent prices in New York are 181.63% higher than in Melbourne
- Consumer prices in New York are 47.04% higher than in Melbourne
- Grocery prices in New York are 37.61% higher than in Melbourne
- Restaurant prices in New York are 61.64% higher than in Melbourne
Despite higher wages – an average New Yorker earns $8,583 per month versus a Melburnian’s $6,360 – the high cost of living in NYC results in 41.43% lower local purchasing power compared to Melbourne.
Cost of living: Brisbane (AU) vs Vancouver (Canada)
Often compared with one another, Brisbane comes out ahead of Vancouver not just in average net pay (Brisbane’s $5,929 vs Vancouver’s $4,892), but also in more affordable living costs.
- Rent prices in Vancouver are 39.70% higher than in Brisbane
- Consumer prices in Vancouver are 3.62% higher than in Brisbane
- Grocery prices in Vancouver are 9.41% higher than in Brisbane
- Restaurant prices in Vancouver are 10.17% higher than in Brisbane
When you compare top global destinations to other Australian cities, such as Brisbane, things look pretty good back home. Local purchasing power in Vancouver is 40.08% lower than in the Queensland capital.
How Australia compares on the global stage
As per the latest Globalization and World Cities (GaWC) report, London and New York City remain the only cities in the world rated 'Alpha++', often with price tags to match.
- Sydney is rated at the 'Alpha+' level, on par with Singapore, Tokyo and Dubai.
- Melbourne is rated 'Alpha-', on par with Boston, San Francisco and Zurich.
- Brisbane and Perth are rated 'Beta', on par with Abu Dhabi.
This places Australian cities in pretty good company, and it can be useful to compare similar cities using this scale.
However, it’s not all rosy, according to Budget Direct general manager Warren Marsh.
“The slow wage growth in Australia compared to the cost of living means living in Australia is still relatively expensive,” he told Savings.com.au
See also: What is average Australian worth in 2026
What traps do wannabe Aussie expats fall into?
Yes, Australia is expensive when you compare it to somewhere like, say, Tehran (Iran). Consumer prices there are 153% lower than in Sydney.
In the words of Mr Marsh:
From a cost of living point of view, when people are moving internationally for work, the biggest trap is not understanding the real cost of moving to certain locations.
While the lure of a new role and a fantastic salary can be hard to ignore, it can be a trap if the cost of housing is 41% more, or your groceries cost you 33% more each week.
Indeed, most Australian expats are hardly moving to second-tier cities. Research from PricewaterhouseCoopers (PWC) estimates the Australian diaspora at more than one million people.
The bulk are concentrated in Europe, with heavy concentrations in the United Kingdom, presumably in London.
A large portion also resides in California and New York, presumably in Los Angeles, San Francisco, and New York City. Vancouver also ranks highly.
In San Francisco you’re looking at around $3,900 to $4,700 a month for a one-bedroom apartment, amounting to more than $800 a week. To compensate, the average salary after tax is more than $11,500, according to Budget Direct’s calculator. Figures are in AU dollars.
The relationship between average monthly earnings and the cost of housing and utilities is what is ultimately driving how affordable it is to live in these locations compared to living in Australia.
It can be argued though that the quality of life in Australia is higher than that of some international destinations.
If we’re looking at North America, one area where it has an advantage is the lower cost of some consumer goods. A monthly rail pass is about 34% cheaper in San Francisco compared to Sydney.
However, by most other metrics, Sydney wins out, though San Francisco’s higher salaries more than make up for the expensive cost of living, especially if you score one of those fancy tech jobs.
See also: Your Financial Checklist Before Moving Overseas
Savings.com.au’s two cents
If you’re itching to move overseas, or you think Australia is too expensive, think again. While some things certainly are, particularly housing, the relatively high salaries might more than make up for it, although that will depend on your own situation.
Australia is expensive, but so are a lot of other desirable places in the world to live.