Cost Of Living In Australia: What You Need To Know



Whether you’re planning to move back to Australia or purchase a property for the future, your first question may be: how expensive is it?

Australia is known for its diverse cities, great weather, and endless natural landscapes. It also ranks 11th in the worldwide cost of living index. Australia’s cost of living remains close to Singapore in 10th and more expensive than Hong Kong in 16th.

Although Australia ranks high in the cost of living index, it’s still a very appealing hub for companies and expat employees relocating from Hong Kong or Singapore to name a couple.

If you’re beginning to plan your living expenses in Australia, this article has everything to get you started.

Cost of Living In Australia: What You Need To Know

Cost Of Living

Living expenses will differ depending on what area of Australia you plan to buy in. Over the last decade, the cost of living has increased in Australia, including higher domestic gas and electricity expenses.

Judging the living costs in Australia is contingent on several factors. It will also vary whether you incorporate the cost of recreation activities. The main expenses include accommodation costs, petrol, insurance, and bills. At the same time, recreational costs will consist of entertainment, eating out, and public transport.

In 2021, the average cost for an individual living in Australia is approximately $50,000 per year, but let’s break down all the specifics that you need to know.


Accommodation costs can be expensive in Australia. There are many housing options available across the country, including apartments, houses, and luxury studios.

Suppose it’s a residential property you’re planning to purchase. In that case, the costs will depend on which area of Australia you want to invest in. As an illustration, buying in Sydney will average out at $950,000, Melbourne at $940,000, and Brisbane at $670,000.

Expats looking for something more short-term can find rental properties in Australia between $165 and $440 per week. In contrast, a homestay will require between $235 and $325 per week.

Get a free Australian mortgage assessment today.

Apply online to get a free recommendation with real rates and repayments.


Whilst Australia’s public healthcare system is efficient and known worldwide, the majority use private health insurance. If you want private health insurance, the average cost for a basic hospital policy will be $166 per month.

Medicare’s government-backed healthcare system is available for all permanent residents and covers hospital treatments and some doctors’ consultations.


For expats moving back to Australia with children, the public school system is very reputable and affordable.

Alternatively, those looking into private schools may face expensive fees. Tuition fees will vary across Australia, but you’ll pay between $19,000 and $42,000 for your child to attend a well-regarded Australian private school.

Other Living Expenses

When considering the cost of living in Australia, you’ll want to plan beyond accommodation, healthcare, and education. You’ll need to account for everyday living expenses, which include:

  • Groceries/food/eating out: $75 – $275 per week.
  • Gas and electricity (utilities): $179 per quarter.
  • Public transport: $15 – $55 per week.
  • Phone and internet: $20 – $55 per week.
  • Entertainment: $80 – $150 per week.
Cost of Living In Australia What You Need To Know

Consumer Price Index

A Consumer Price Index (CPI) measures the average price of a basket of goods and services over time to make people aware of average household expenditures. In Australia, it calculates the change in average spending in city centres rather than rural areas. The CPI covers household inflation by dividing living costs statistics into categories of household expenditure.

The CPI doesn’t include any of the costs involved in purchasing an established property in Australia. Still, it does account for rent and new dwelling purchases.

Over the past decade, the Australian Parliament House has calculated a 23.4% rise in CPI. This doesn’t mean that all expenses and products have risen at this rate. Instead, some expenditure classes have increased more than others.

Expenditure Class

10 Year Increase (%)

Average Cost Now



$24.00 per pack




Medical and Hospital Services


$166 per month

Gas and Other Household Fuels


$179 per quarter

Child Care


$95 per day

Secondary Education



Water and Sewerage


$250 per quarter

Preschool and Primary Education


$45-$80 per day

Motor Vehicle Services


$150-$240 for each service

Living In Major Cities

No matter where you live, capital cities will always mean a higher cost of living. Major cities such as Sydney and Melbourne are the most popular destinations for residential and investment property purchases. With outstanding infrastructures, education options, and healthcare systems, they appeal to many people.

If you want to live in one of these two expensive cities, the main cost you face is house prices. While Sydney tops the list with a median price of $950,000 and Melbourne rests closely behind at $940,000, median house prices in Perth and Brisbane drop significantly.

House prices in Brisbane average $670,000, while in Perth, the medium price remains at $590,000.

Living in Sydney will also equate to a higher cost of living. For example, consumer prices in Sydney are 8% higher than in Perth, and rent prices are 83% higher.

You may also want to consider that mid-range restaurant prices are 2% higher, and even average grocery costs are 3% higher.

Get a free Australian mortgage assessment today.

Apply online to get a free recommendation with real rates and repayments.

Why Do Banks Care About My Expenses?

Understanding the average costs of living in Australia is essential when approaching a bank or lender. Home loans are judged by your ability to make repayments on time every month.

When a bank begins to assess your ability to borrow money, the main factor is comparing your spending and income. This is your borrowing power, and you can start to calculate this using a Borrowing Power Calculator.

Lenders take your regular spending habits and then compare this with the home loan packages they offer. Lenders will raise any red flags on excessive expenses such as luxury items.

From a lender’s perspective, living expenses are the first indication of your character as a borrower and successful homeowner.

How Do Banks Calculate My Living Expenses?

The exact calculations of your living expenses will depend on the lender you choose. Still, there are standard methods used by lenders. These include:

  • Being asked to self-assess living expenses on a home loan application.
  • Review bank accounts and credit card statements once you confirm a self-assessment application.
  • Using the Household Expenditure Method (HEM), which is based on family size and income.

How Can I Save?

When planning the move back to Australia, it’s helpful to assess all the ways you could save on living expenses. We’ve provided you with several tips to get you started:

  • Conduct regular spending checks to identify areas you could save on.
  • Begin to thoroughly compare prices and assess competitive rates for all monthly living expenses.
  • Try to reduce impulsive buying habits.

Suppose you’re an expat planning to move back to Australia shortly. In that case, you may want to get in touch with a leading  expat mortgage brokerage, Odin Mortgage.

We specialise in obtaining overseas mortgages for our expat customers and making them aware of all the costs involved in the process.

If you’re wondering how much you can borrow for your Australian property purchase, come and speak to us today.

Cost of Living In Australia What You Need To Know

Get a free Australian mortgage assessment today.

Apply online to get a free recommendation with real rates and repayments.

Frequently Asked Questions

Is Australia Expensive To Live In?

Australia currently sits as the 11th most expensive country in the world for the cost of living. This means that average living expenses are higher than in the US and Hong Kong. The majority of these expenses come from housing purchases and the excess of imported goods and products.

How Much Money Do You Need To Live Comfortably In Australia?

The living costs for a single person in Australia can reach as high as $3,000 a month. This includes several living expenses like gas and electricity, groceries, and entertainment. To live comfortably in Australia it’s recommended to have a monthly income between $7,000 and $8,000.

Is It Cheaper To Live In The US Or Australia?

Australia is almost 24% more expensive to live in than the US. Many living costs are more costly in Australia than they are in the US. For example, a basic restaurant meal is 12% more expensive in Australia and petrol is 59% more expensive.

How Much Does It Cost To Live Per Year In Australia?

When planning the cost of living in Australia, this will differ between individuals. Still, on average, one person will pay around $20,000 every year in living expenses. Taking this into consideration, the average family will need approximately $50,000 every year.

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