Finance Your Budget World’s costliest cities: Australians slugged with high prices

World’s costliest cities: Australians slugged with high prices

australia cost of living
You're not imagining it: it's expensive to live Down Under. Photo: Getty
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Australians pay some of the highest prices in the world for everyday necessities like food, clothing, school fees and utilities, according to a new study.

The strong Aussie dollar trapped five of our capital cities in the top 50 most expensive of The Economist‘s latest cost of living survey, published on Tuesday.

Sydney is now the 14th most expensive city, up from 20th last year, while Melbourne jumped from 21st to 15th. Brisbane (31), Adelaide (35) and Perth (49) also made the list of 133 cities.

This means Sydney and Melbourne prices on common bills and groceries are right up there with what you’d pay in many global metropolises.

For example, Sydneysiders pay $US4.04 for a loaf of bread, compared to $US3.55 in Singapore and Copenhagen.

An average bottle of wine in Sydney costs $US19.15, whereas it’s only $US10.35 in Paris and $US11.89 in Tokyo.

And it’ll cost you $US42.50 for a tank of petrol at a Sydney service station, versus $US30.50 in New York.

The twice-yearly survey, published for more than 30 years by The Economist magazine’s intelligence unit, also ranked Brisbane (31) and Adelaide (35) among the “biggest movers”. Both plummeted 18 places in affordability.

Consumers must be aware of potential health risks when buying groceries.
Overall, prices in Sydney were 98 per cent, and Melbourne’s 95 per cent, of what you’d pay in New York. Photo: Getty

Survey editor Jon Copestake said the stronger Australian dollar is partly to blame. The Aussie is trading at about 77 US cents, which is nowhere near the peak of $US1.10 in 2010, but still relatively high.

“The rise of Australian and New Zealand cities up the ranking is to be expected, given that both countries’ currencies have appreciated in value in the last year or so,” Mr Copestake said in a statement on Tuesday.

“This movement is in sync with a number of other Asian cities, which have come to dominate at the top of the ranking.”

Asia did indeed dominate: the region claimed half the top 10. Singapore claimed the dubious honour of most expensive, followed by Hong Kong (2), the Japanese cities of Tokyo (4) and Osaka (5), and the South Korean capital Seoul (6).

New York City, on which the survey is based, was the only North American city in the top 10, coming in ninth. All cities in the league table were compared to the Big Apple, with more expensive cities given an index score above 100 and cheaper ones a score under 100.

It’s important to note that the survey only looked at 133 cities in 97 countries, so the absence of Darwin, Canberra and Hobart may be explained by limited scope, not low prices.

While all five Australian cities on the list worsened in affordability since 2016, their rankings were still better than in 2015, when Sydney ranked 5th and Melbourne 6th.

The Economist‘s intelligence unit assessed living costs by comparing more than 400 individual prices across 160 products and services, including food, drink, clothing, household supplies, rent, transport, utility bills, private school fees and recreation.

While Australians may cringe at these high prices, the good news is we’ve avoided what the report delicately termed the “considerable element of risk” endured by the cheapest cities.

For example, at the very bottom end of the league table were Almaty, Kazakhstan; Lagos, Nigeria; Bangalore, India; and Karachi, Pakistan.

“Put simply,” Mr Copestake wrote, “cheaper cities tend also to be less liveable.”

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