Where personal prosperity is concerned, Australia is no joke. It is currently one of the richest nations on the globe, and – as recently as 2011 – the World Bank’s annual economic forecast determined that Australia would “grow more rapidly [in 2012] than global high income countries as a whole.” (i) Meanwhile, Australia is placed at the absolute top of the world in certain wealth-related rankings. For example, Australia actually claims the highest median wealth per citizen in the world (last estimated at 222,000 USD.) This number is helped considerably by the fact that, despite having less than 0.5% of the world’s total population, Australia lays claim to around 4% of that population that could comfortably call itself “wealthy.”
This wealth is largely invested in real assets, with the 65% of wealth designated as such being the second highest in the world (Norway takes the cake here.) Owing to a per capita level of loan debt and credit card debt that is much less pronounced than what is encountered in the U.S., only a small minority of Australians has a net dollar worth that would not be in the quadruple digits.The nation’s mining industry (which has particularly benefited Western Australia and its capital, Perth) is one of Australia’s major economic success stories, and its current AAA credit rating is well ahead of the recently downgraded credit rating of the U.S. Meanwhile, certain urban hubs of Australia have been singled out for special praise: the respected Economist Intelligence Unit has crowned Melbourne as the “most livable city” in its Global Livability Report, giving it 99.5 points out of a possible 100. (ii)
Australian Dollar Appreciation
Throughout the 21st century, the Australian dollar has appreciated at a fairly steady clip, being highly competitive against the U.S. dollar from 2008-2010 in particular. As of this writing, one American dollar will buy you roughly 0.95 Australian dollars (though, in the past year, there were moments where the exchange rate was more favorable to the U.S., with one American dollar able to be exchanged for 1.02 Australian dollars.) As can probably be guessed, this has meant a rising cost of living, and some definite disparities between the prices of goods and services in Australia and elsewhere in the developed world.
Australian Real Estate
Given the significant percentage of living costs that housing normally takes up, it would be best to discuss this first. The property market in Australia is somewhat strained owing to the high amount of professional-level migrants to the country, and housing costs may in fact be the key area where Australia does not perform well against the North American land mass. The average cost of home ownership in Australia will be around 400,000 USD, which, if compared to U.S. real estate prices, is even higher than the average housing cost in the notoriously high-priced Californian market.
Australians are certainly aware of this, and are likely to sound off about how the prices asked are over 50% more than their true market value, leading to speculations of an “Aussie housing bubble” in the making. The aforementioned Melbourne is one of the centers of this criticism, owing to factors such as stable or declining population growth that is coinciding with a Victoria-wide construction boom.
Australian Goods and Services
Australian prices for that most essential of commodities – food and drink – vary from one supermarket to the next, with many residents relying on the German chain ALDI for the best bargains. All told, though, there are no staple items that seem exorbitant when compared with U.S. equivalents. Oddly, given the high prices exacted in the U.S. for “sin taxed” items like cigarettes, that country offers one Australian favorite – beer – at a cheaper price.
Health care services in Australia will be more familiar to expats from the U.K. than those coming from the U.S. Though the Unites States health care system is currently in a state of flux, with the Affordable Health Care Act of 2010 yet to be put into wide practice, the Australian system is generally regarded as being cheaper even after the nearly 2% levy is charged on personal employment income.
Utilities (e.g. electricity) compare favorably on the global scale, with some individuals reporting monthly costs in a modest apartment being from $50 to $100 in the local currency. Internet or telecommunication services, meanwhile, are around $30 monthly, which is highly similar to such costs incurred in the United States and U.K.
As is the case with all countries, your own personal opinions of what constitutes “the good life” will ultimately make the difference as to whether you are comfortable in Australia or not. As such, individual complaints about Australia’s high cost of living should be taken seriously only if the complainant isn’t attempting to blame a wasteful lifestyle and poor money management on the vicissitudes of the Australian economy.
(i) http://blogs.crikey.com.au/thestump/2011/01/13/world-bank-expects-australian-gdp-growth-of-3-2-in-2011-and-3-8-in-2012/. Retrieved March 28, 2013.
(ii) https://www.eiu.com/public/topical_report.aspx?campaignid=Liveability2012. Retrieved March 28, 2013.