Living in Australia has numerous benefits, including excellent healthcare, gorgeous national parks to explore, and fantastic institutions of higher learning that are perfect for international students. As one might expect from a highly developed nation, Australia is an expensive country to live in; it is more expensive to live here than 87% of other countries.
However, you shouldn’t let financial stress keep you from pursuing your dreams. In this article, we’ll discuss key facts about the Australia cost of living so you can live comfortably in this land of adventures!
Calculating the Cost of Living With a Consumer Price Index
The cost of living describes how much the average household can expect to spend on monthly expenses. Generally, the cost of living is assessed using the Consumer Price Index (CPI), which tracks price rises on the essentials.
The CPI measures the change over time in a representative basket of basic expenses, which includes everyday items like food, basic utilities, and housing costs. The CPI will vary depending on where you are in the country. Living in the city centre of major cities will cost more because of the more expensive property market, but other cities may have different costs, such as food in remote areas.
Right now, many Australians are experiencing a cost-of-living crisis associated with the higher cost of essentials like housing. The largest annual rise in the cost of living was in June 2023, when the CPI rose by 9.6%.
The Australian Bureau of Statistics notes that the March quarter of 2024 had a CPI inflation rate of 3.6%, showing that costs are easing slightly.
Housing: The Biggest Expense
Housing costs are generally the greatest expense in the CPI, and high inflation generally means high rents. However, the cost will vary greatly depending on where you settle, making it crucial to understand the current housing cost in your chosen area.
Renting
Sydney in New South Wales is one of Australia’s most expensive cities, with the average renter paying approximately $950 per week. However, this major city has more affordable rents than the rental prices on the Gold Coast, where short-term vacation rentals have pushed out long-term rentals. Demand for apartments is high, but supply is low, creating fierce competition.
Melbourne, Victoria, has a lower rental price than Sydney at $589 a week. However, it has risen by 14.6% over the past year. Vacancy rates are also incredibly low at only 1.2%, and there are often about 14 applicants for the same unit.
Thankfully, smaller cities and rural areas are often much more affordable, especially in South Australia and Queensland. Coober Pedy, a suburb in South Australia, has rents of just $180 a week, while Peterborough, also in South Australia, is a rural area with rents of just $195.
There are several types of rentals that you can pursue, and your decision depends on how much space you require. Renting whole houses will cost more, but this is a better choice if you’re immigrating with family. An apartment may also be a good choice if you want to study abroad and want more privacy.
If you’re a travel addict who doesn’t mind sharing space, private rooms in shared accommodation are a great choice for a single person.
Buying Property
The high cost of living includes higher property values, especially in big cities. Sydney, New South Wales, is the world’s second least affordable property market, with a median price of $1.6 million.
Brisbane, Queensland, has a median price of $937,000. This is higher than in Melbourne, Victoria, where the average home costs around $917,000.
Western Australia is your best bet if you’re seeking to save money on a property in a major metropolitan area. Perth, the largest city in the state, has a median home price of approximately $620,000.
Surprisingly, the cheapest housing prices are in the gorgeous state of Tasmania, where the median house price is just $455,000. The Northern Territory is also quite affordable at around $560,000, partly because few people choose to live in this more rugged area of Australia.
While these things cost a lot, you must also worry about stamp duty and conveyancing fees, both necessary when transferring property. Stamp duty prices vary dramatically by state, with the Northern Territory having the highest cost at around AU $23,000. Conveyancing fees (similar to closing costs in the US) usually go up to $2,500.
Housing Affordability
Your decision to rent or secure a home loan depends on your financial situation and goals and where in the country you intend to live. In about 90% of the suburbs around major metropolitan areas, the high cost of housing has made it cheaper to rent than buy.
All the top ten areas where it is cheaper to buy than rent are in Western Australia, mostly around Perth.
Given how many Aussies are struggling with the cost of living, the Australian government has introduced several programs to help ease prices. The recently launched Housing Support Program is expected to build over 1.2 million homes in the next five years, easing the housing crisis.
Furthermore, eligible Australians can apply for Commonwealth Rent Assistance, which pays 75 cents for every dollar above a given threshold. Each territory administers private rent assistance for qualifying households, typically one-off support for those in crisis.
An interesting project in Australia is the offset account provided by banks. This is a bank account linked to mortgage repayments that reduces the amount of interest you have to pay.
Everyday Expenses
Utility bills, groceries, and transportation are other living costs that factor into your budget. After housing, these make up the bulk of the typical Australian’s budget.
Groceries and Food
The average cost of food in Australia is approximately AU $53 per day, or around US $36. Where you shop will greatly impact your budget. About 60% of Australian grocery stores are owned by Woolworths or Coles, where the typical grocery bill for one person is $151 or $156, respectively.
Despite being untaxed, non-alcoholic beverages are expensive in the country. You can expect to pay about $38 for a bottle of Gordon’s 0.0. However, soft drinks are typically affordable at around $3 per liter.
Eating out in Australia is expensive. The average household spends approximately AU $230 on restaurant meals. A basic meal will cost you about AU $15 to $20. Thankfully, you don’t have to worry about tipping your waiter.
Transportation
Public transportation is typically constrained within big cities, and roads are the main routes between states. The primary forms of public transportation are trains, buses, ferries, and light rail.
Each of the bigger cities (Sydney, Melbourne, Brisbane, Adelaide, Canberra, Perth, Hobart, and Darwin) has its transport cards, which are electronic or prepaid cards rather than paper tickets. The average commuter spends around AU $40.72 per week on fares.
If you intend to travel widely across the continent, you will need a car, as there aren’t major commuter rails connecting the cities. Gas is expensive, around AU $3.78 per liter or around US $5.12 per gallon.
Forbes states that car insurance can cost between AU $800 and $3,000 annually. However, this can vary greatly depending on your chosen carrier and overall risk profile.
Registration also differs enormously between states. In NSW, registration is around AU $233, but in Canberra, it’s as much as AU $1,214.
Because Australia is so big, domestic flights are a common travel method. There are 613 airports in Australia, including 13 international airports. Across the continent, the average economy return ticket is around AU $400, but this will differ based on your destination. For example, a flight from Sydney to Perth may be about AU $700.
These high costs are why many prefer to drive from place to place – especially because the routes are so scenic.
Utilities
In general, energy plans, which include electricity, gas, and water, cost about AU $220. A basic internet package will cost about AU $70. However, it’s important to note that your electricity bills may rise significantly during the hotter months because of higher energy usage for air conditioning.
Lifestyle and Entertainment
Many people flock to Australia because of its fun activities (especially outdoor adventures) throughout the year. Thinking ahead lets you find the best nightlife, sports, and tourism destinations deals.
Leisure Activities
The typical household spends approximately AU $1,400 per month on leisure activities, which include sports tickets, theme park entrance, outdoor sports, and cultural events like Vivid Sydney and Toowoomba Carnival of Flowers.
Thankfully, there are many free activities to enjoy across the country. Many of the national parks and reserves do not charge vehicle entry fees, which are quite low. For example, most of the parks in NSW only cost AU $8 per car per day, meaning the whole family can enjoy fun on a budget.
Travel and Tourism
The cost of traveling around Australia depends significantly on where you go and what you do. A short road trip in a van, a popular way to see the sights, would cost about AU $1,300, but hotels and domestic airfare are expensive.
You can expect to pay AU $400 on a domestic flight and between AU $69 and AU $87 per night for a budget hotel room.
The average visitor spends AU $50 per day on entry fees and passes for tourist attractions. However, this doesn’t include souvenirs and food.
Shopping
Because many things must be imported, clothing, electronics, and souvenirs are often much more expensive in Australia than elsewhere. On average, clothing costs approximately 26.8% more than in the US, and electronics are no better.
Regarding souvenirs, you can expect to pay around AU $80 for a pair of opal studs, but it’s well worth it. These are locally made and will be a perfect reminder of your trip.
Healthcare and Education
Regarding the cost of living, Australia beats the United States in many areas, including healthcare and education.
Healthcare
Australia has free or low-cost public healthcare for Australian citizens and permanent residents. Medicare allows you to enjoy free basic healthcare, including many diagnostics. If you’re visiting, you can access private health insurance for private hospitals, where you may receive better care.
Australians generally spend approximately AU $1,200 per year on out-of-pocket healthcare costs, which is incredibly low compared to the US.
Education
Australia has both public and private schools, depending on what you want to study. The government subsidizes public universities and offers various classes, while private universities offer more specialized courses.
International students can expect to pay tuition fees between AU $20,000 and AU $45,000 for an undergraduate degree. However, domestic students may have part of their tuition fees covered by the government if they study at a Commonwealth Supported Place (CSP). CSPs can be at public and private universities. At all universities, a graduate or doctoral degree will cost significantly more.
Thankfully, the Australian government has a wide variety of scholarships available for international students, including some that may cover the entire cost of tuition. Students who apply for the FAFSA can transfer their financial aid to some Australian universities to cover their tuition.
Salaries and Wages
The average wage in Australia is AU $89,122, which is about US $59,000. The minimum wage is AU $24.10 per hour, but there are also award rates for certain industries. Award wages include employees in hospitality and tourism, retail, manufacturing, education, and healthcare. These increase proportionally with the rise in minimum wages.
It’s important to note that the real wage is not that high. Because of the rising cost of living, real wages have dropped by 4.8% since the pandemic. The most well-paid industries in Australia include medicine, finance, and information technology.
Average Living Cost Comparison
The cost of living in Australia is about 4.9% more expensive than in the United States. While you’ll pay less for childcare and housing, entertainment and transportation are significantly more expensive. Groceries also cost more in Australia.
Australia is more expensive than many places in Europe. It’s 26.7% pricier than France, 33.5% more expensive than Germany, and a shocking 52.5% more expensive than Italy. The main differences are transportation and housing, as Europe has a sophisticated transit system and subsidized housing for much of the populace.
Australia is only slightly more expensive than Southeast Asia. It’s about 7.2% pricier than Singapore. Eating out in Australia is far more expensive than in Singapore, but groceries, housing, and childcare are cheaper.
The Land Down Under is 3.5 times more expensive than Malaysia. Therefore, Malaysia has a large Australian expat community, especially in Penang and Selangor.
Tips to Save Money in Australia
While living in Australia can be expensive, there are many ways to reduce your cost of living, including the following:
Budgeting and Tracking Your Expenses
Budgeting is essential for anyone, as it can help you identify where to cut back. For example, shopping around can help you get the best price and shave some dollars off your bill if you’re spending a lot on groceries.
Finding Affordable Accommodation and Transportation
Housing is one of the biggest costs of living in Australia. Moving in with others and accepting a private room can make housing much more affordable. Investing in a bike can help you save money on commuting.
Cooking at Home and Eating Out Less
Restaurants are very pricey in Australia. Therefore, cooking at home rather than spending money on fast food or restaurant meals can help you make your dollars stretch.
Taking Advantage of Free or Discounted Activities
Australia offers many free outdoor activities, and the larger cities often host cultural events open to everyone. Planning your visits to big attractions during off-peak times can help you get the best deal on entertainment, and you can also look for discount sites to help you save.
Utilizing Student or Senior Discounts
Every state and territory has a Seniors Card, which entitles you to discounts on purchases. You can also sign up for National Seniors Australia, which has discounts on entertainment and healthcare. Additionally, many businesses offer student discounts of up to 10% on food, clothing, and more.
Living in Australia and Managing the Cost of Living
Decent wages, a beautiful climate, and an exciting culture draw many toward Australia. However, it’s important to be realistic about what you can afford. Housing is expensive, especially in the major metropolitan centers, while smaller areas have the biggest inventory of vacant homes. Restaurants are also costly, and groceries are more expensive. However, healthcare and childcare are more affordable, helping balance expenses.
If you’re choosing to immigrate to this beautiful country, be prepared for sticker shock and shop around for the best deals on your necessities, such as food and housing. While the cost of living may be high, you shouldn’t let it stop you from achieving your Australian dream!