IT’S no surprise to most Australians that the cost of living varies greatly from one city, state or territory to another.
But exactly which places are the most affordable when it comes to everyday expenses including rent, fuel, groceries, transport, utilities and education? And which ones will burn a hole in your pocket faster than the others?
The latest report from Numbeo, a cost of living website which collates prices of goods and services from hundreds of cities around the world, shows that almost everything is cheaper in Hobart compared to other major cities nationwide.
It also confirmed what Sydneysiders already knew: it’s the most expensive place to live in the country. Melbourne, Darwin and Perth trail closely behind.
Labor leader Bill Shorten said the government’s priorities – including the Australian mining sector – were out of whack. “I wish they’d just start talking about everyday Aussies in terms of cost of living,” he said on Wednesday.
While Sydney ranked 32 in the list of the world’s most expensive cities, it was the 16th most expensive city in terms of rent, according to Numbeo.
Sydney has this year risen to number 32 in this year’s Cost of Living Index, up from 41 last year, according to Numbeo.
Melbourne rose to 64, up from 77, while Adelaide, Cairns, Hobart and Canberra also moved up the list to 58, 69, 82 and 103 respectively.
Only Perth (56), Darwin (68) and Brisbane (93) have become more affordable, according to the site, which ranks the results based on information provided by thousands of residents.
RENT, CHILDCARE AND RESTAURANTS
A one-bedroom, city centre apartment costs an average of $2681.48 per month in Sydney.
That’s compared with Melbourne ($1767.60), Canberra ($1733.26), Brisbane ($1726.13), Adelaide ($1705.67), Gold Coast ($1568.92), Darwin ($1524.35), Perth ($1523.41) and Hobart ($1208.33). Those with kids can more than double their outgoing expenses if they live in Sydney with the cost of sending one child to childcare full-time for a month about $2038.27. Child care is even more expensive on the Gold Coast ($2250) but significantly cheaper in Adelaide ($1600), Melbourne ($1478), Brisbane ($1243), Perth ($1214), Darwin ($1,200), Canberra ($1168) and Hobart ($683.33), according to the site.
The data also showed that costs including groceries, rent and restaurant prices were most expensive in Sydney and Darwin, while cities like Hobart, Cairns and the Gold Coast had some of the cheapest.
COFFEE, PETROL, UTILITIES
But not all is lost for Sydney – while residents might be down thousands of dollars in rent, they’re up an entire buck or two when it comes to coffee. Sydney is home to country’s cheapest hot drinks with a regular cappuccino costing about $3.90, compared with the highest median price for the same item in Darwin, at $4.75.
The Northern Territory capital might be small in size – with a total population of about 250,000 people – but it’s also home to some of the highest prices for fuel and utilities nationwide.
The national average for unleaded petrol is 138.9c per litre. But in the NT, prices soar above the rest, with a median price of 183.9c per litre in the troubled town of Tennant Creek, 176.9c per litre in Alice Springs and 150.2c per litre in the capital of Darwin, according to 2018 NT government figures. The median price for monthly utilities – including power and water – in Darwin is $332.80. That’s compared with the cheapest average of $181.20 per month in Perth. Even a meal at McDonalds will cost about an extra $2 than in other states.
MILK, BREAD AND BEER
The Gold Coast is also where you can find the country’s cheapest bread, at $2.12 a loaf. Brisbane follows closely behind ($2.14), with Sydney selling the staple food at the highest average rate of $2.80. And if you’re up for a good time at the lowest price possible, the Gold Coast is also where it’s at, with the nation’s cheapest in-restaurant domestic beer ($5.75). That’s compared to the most expensive average of $8 in both Melbourne and Darwin.
For the more straight-laced, Hobart could be a better option, boasting the cheapest milk at $1.11 for one litre. In Perth, the same product costs consumers about $1.59 – the highest average in Australia.
But the most isolated city in the world makes up in electricity prices what it lacks in cartons of milk, offering the cheapest average price for utilities in the nation. The average monthly cost of a power and water bill in a 85m2 apartment in Perth is $181.2. That’s compared to
Darwin ($332.80), Adelaide ($297.95), Melbourne (214.82), Sydney ($176.69), Brisbane ($212.60), Hobart ($236.99), Canberra ($184.73) and the Gold Coast ($184.41).
Hobart is the most southern of Australia’s capital cities, its harbour is the second-deepest natural port in the world, making it a popular destination for boaties. It’s also one of the cheapest capital cities in the country although wages are also below the national average. Hobart is also known for its arts and culture, its majestic scenery such as Mt Wellington, picturesque waterways including the Derwent River and rich cafe and restaurant scene. With a median house price of $402,000, strong capital growth and good long- term projections, the area presents a solid market.
Even suburbs that are located within less than 2km from the CBD, including North Hobart and South Hobart, with median houses prices of $582,000 and $631,000, respectively, are relatively affordable compared to cities like Sydney, where the median house price is upwards of $1 million and Melbourne where it has pushed past $840,000.
In Victoria, households are shelling out almost $75,000 a year on general living expenses, a major study of spending habits reveals.
The 2017 Household Expenditure Survey found that in 2015-16 essentials cost $843 of the average $1430 Victorians spent on goods and services each week.
Housing costs – on rent, mortgages, rates and home-and-contents insurance – were the biggest drain ($257), the Herald Sun reported.
Food, including meals out and non-alcoholic drinks, cost $244, and transport – driving, taxi fares, and train, tram and bus fares – cost $218.
A buoyant Canberra housing market is leading to healthy long-term investment options for savvy homebuyers, according to RiskWise Property Research.
While the Sydney market goes flat, many Sydney-based investors and buyers’ agents are looking to Canberra – which has a median house price of about $750,000 – as a solid long-term property market that delivers both capital growth and solid rental return.
Less than 300km southwest of Sydney, Canberra has enjoyed solid capital growth of 23 per cent over the past five years and 10 per cent in the past 12 months.
RiskWise Property Research CEO Doron Peleg said it was a trend set to continue.
“This will be driven by ongoing population growth due to the strength of the local labour market and its growing status as a city of choice for a growing number of Australians,” Mr Peleg said.
“Canberra is a rapidly expanding city with a stable property market that offers relatively affordable housing (in house-to-income terms). In addition, ongoing infrastructure projects, such as the Canberra Light Rail Network, will bring significant benefits to the area.”
An hour’s drive from the state capital Brisbane, the Gold Coast is the sixth largest city in Australia and is forecast to have 1.2 million residents living there by 2050, according to demographer Bernard Salt. The region has a stable property market that offers relatively affordable beachside suburbs, such as Miami which has a median house price of $749,000, according to industry experts.
CoreLogic’s regional market update to December 2017 places the median house price at $634,423, while the median unit price is $411,229.
RiskWise CEO Doron Peleg said that despite gaining infamy for violent incidences and drunken behaviour in Surfers Paradise, the Gold Coast was one of the most popular destinations for both owner-occupiers and investors in southeast Queensland.
“It has beautiful beachside and waterside suburbs, an unrivalled lifestyle, good infrastructure, a large number of well-off residents and locals who describe the Gold Coast as ‘heaven for children’,” Mr Peleg said.
“The Gold Coast has a stable property market that offers both affordability and excellent access to superb beach and coastal areas, and that is very appealing to buyers.”
But there are fears about what will become of the glitter strip’s property market once the Commonwealth Games, set to start this month, are done and dusted.
Collier’s Gold Coast International director Darrell Irwin said property market indicators showed the region had a “healthy sector” that would survive the exodus when the curtain closes on the Games.
“The Games has brought forward infrastructure investment in projects such as the light rail construction, and upgrades to the aquatic centre and Carrara Stadium, which have helped fuel demand across the board in the residential, commercial office, retail, and industrial sectors,” he said.
“We’ve seen commercial office vacancy rates continue to fall over the last three years to the current level of 10.3 per cent as reported in the most recent Property Council of Australia figures.
“With no new office buildings under construction, we expect to see that vacancy rate fall further.
“Similarly in the industrial market, there’s been strong demand, a falling vacancy rate and limited land supply.”
Experts warn of ‘debt bomb’ as housing downturn worsens
That’s according to the sobering 60 Minutes segment Bricks and Slaughter which aired last night, revealing the country’s property downturn was just the tip of the iceberg.
According to reporter Tom Steinfort, the current slump is actually “more like falling off a cliff”, with a number of real estate and finance experts claiming houses could plummet in value by up to 40 per cent in the next 12 months.
If that happens, it would also cause an economic “catastrophe”.
Mr Steinfort spoke with data scientist Martin North from Digital Finance Analytics, who said Australia was uniquely vulnerable when it came to an economic crash tied to a property downturn.
“At the worst end of the spectrum, if everything turns against us we could see property prices 40-45 per cent down from their peaks, which is a huge deal,” he said.
“That’s higher than any other country in the Western world by a long way.
“There’s probably no country in the world more susceptible to the ramifications of a housing crash than Australia. We are uniquely exposed at the moment.”
Mr North said Australia was now in the same position as the US was back in 2006 and 2007 — a position which triggered an economic collapse.
“As a society, and as a government, and as a regulatory system, we’re all banking on the home price engine that just goes on giving and giving and giving. It’s not going to,” he said.
“We’ve got a debt bomb, we’ve got a debt crisis and at some point it’s going to explode in our face.”
He said foreclosures had also risen by 600 per cent in the region.
“The mortgage stress is definitely being felt especially in this area,” he said.
60 Minutes also spoke with several Aussie homeowners who gave harrowing details of the stress they faced trying to pay off their mortgages, including having their power turned off and being “hounded’ by their banks.
What does a million dollars buy in Aussie capital cities?
Market analyst Louis Christopher of SQM Research said the market had been “clearly overvalued”, labelling the downturn as the “correction we had to have” — at least in Sydney and Melbourne.
“On our numbers, Sydney was effectively over 40 per cent overvalued. And Melbourne was overvalued by about the same amount,” he said.
But property investor Bushy Martin said the blame lay squarely at the feet of buyers who “mortgaged themselves up to their eyeballs” in a bid to snap up dream homes before being able to afford them.
However, the segment has also sparked backlash online, with some claiming the situation had been exaggerated.
One Reddit user branded the report as an example of “alarmist journalism and scare tactics”, while another said it was “dramatic and cringe-worthy”.
Others also criticised the segment for making it seem like all homeowners would be affected, when the downturn was actually mainly focused in the NSW and Victorian capitals.
And some said it was unfair to blame the banks for the situation, and that homeowners needed to take responsibility for their own decisions.
That was in response to comments made by one homeowner on the program, who said the bank had “suddenly switched the mortgage to interest and principal”, raising his repayments by 57 per cent.
“The interest only part annoyed me the most. The bank didn’t ‘suddenly change’ your repayment from (interest only) to (Principal and interest) your IO term expired. You a) knew this would happen and b) assumed the bank would renew it when it expired. I hope this speculator gets burnt first,” one Reddit user said.
Related article: Experts warn of ‘debt bomb’ as housing downturn worsens
Australia’s best place to invest is here in Queensland
EXPERTS are hailing Queensland’s Sunshine Coast as the hottest place in the nation to invest in property right now.
A lack of housing, a tight rental market and a rapidly growing population mean supply is failing to keep up with demand in the region – creating perfect conditions for investors.
Leading real estate industry figure John McGrath said the Sunshine Coast presented one of the best opportunities for capital growth because of its liveability, affordability and future economic prospects.
“From an investment point of view, where in Australia right now can you invest your dollar and get better returns than the Sunshine Coast or southeast Queensland?” Mr McGrath said.
” I don’t think there is a location that’s going to offer better investment growth in the future.”
His views are echoed by prestige property agent Tom Offermann of Tom Offermann Real Estate, who claims the Sunshine Coast “is on the cusp of the highest growth period in its history”.
“This is being driven by a raft of infrastructure projects that are delivering exceptional lifestyles, which in the past required some compromises for people coming from big cities,” Mr Offermann said.
The region is in the midst of an infrastructure boom, with billions of dollars being invested in upgrading and creating new facilities.
Work is underway on a new runway at the local airport, which is set to become international by 2020, and a new hospital and health precinct has recently been established.
“These are game changers,” Mr Offermann said.
“Astute property investors who recognise what is happening, and take action to secure the best located property they can afford, will reap the rewards of their foresight.”
Local agents say the region is crying out for more investment properties to cater to the needs of the increasing population.
According to demographer Bernard Salt, the Sunshine Coast’s population of around 298,000 residents is set to rise to 550,000 in 23 years, which will require more than 100,000 new homes to be built.
The latest Real Estate Institute of Queensland figures show the rental vacancy rate on the Sunshine Coast is just 1 per cent, with Caloundra having the tightest vacancy rate in the state at just 0.5 per cent.
It’s good news for investors, who are currently achieving healthy rental returns of around 5 per cent.
In its recent report, Herron Todd White noted an increase in investor activity in the Sunshine Coast market, with the sub $350,000 unit and townhouse sector particularly popular.
“It’s not uncommon to see townhouses selling for $220,000 attracting a rental of $280 per week – over 6.5 per cent gross return,” the report said.
For investors looking to capitalise on the growth in the region, McGrath Real Estate founder John McGrath said now was the time to get into the market.
“I think there is a great opportunity, in particular right now, because we’ve seen Sydney and Melbourne have shown unprecedented growth over the last five or six years,” he said.
“Now those markets have come to a plateau and a lot of people are going to be saying; ‘Do we take our profits and reinvest them, or, in fact, do we move up north and get better value for money?’
“So, I think right now there’s a terrific window of opportunity where people can capitalise on the immense growth we’ve seen in the southern states.”
Reed & Co director Adrian Reed the increased international access the new airport would provide would likely change the profile of buyers in the Noosa region.
“We’re currently seeing an increase in Australian expats buying back into the market, but if accessibility becomes easier, we’re expecting a more aggressive upward trend in high-end premium property,” Mr Reed said.
He said that lending restrictions and the impact of the banking royal commission had had little impact on the region’s prestige market.
“The vast majority of deals I’m doing at the top end of the market are cash,” he said.
“They’re self funded retirees who’ve already sold their principal place of residence.”
Owner/builder Paul Saunderson, who is selling his home in Noosa Heads through Peter TeWhata of Tom Offermann Real Estate, said the local market was “out of control at the moment”.
“There are houses getting knocked down and new dwellings being built everywhere,” Mr Saunderson said.
He said the contemporary, four-bedroom, three-bathroom property at 20 Sanctuary Ave, Noosa Heads, which he lived in with his wife and two children, was attracting strong interest from interstate and overseas investors.
“It’s a good investment opportunity because it’s been valued as holiday letting, which is anywhere from $6000 to $10,000 a week during peak season,” Mr Saunderson said.
Jamie Smith of Century 21 On Duporth in Maroochydore said he’d never seen so much activity in the Sunshine Coast property market, with strong interest from both local and interstate investors.
Mr Smith said many investors were looking to buy in the less expensive suburbs, where new housing developments were popping up, such as Caloundra, Sippy Downs, Birtinya and Mountain Creek.
“It’s definitely unprecedented in terms of what we’re seeing on the Coast,” he said.
But Mr Smith said investors who were not already in the market needed to act fast.
“If you were here three years ago, you could have bought between $400,000 and $500,000,” he said.
“Now you’re looking at anywhere from $600,000 plus, so it’s definitely changed a little bit.”
SUNSHINE COAST SUBURBS FOR BEST CAPITAL GROWTH
Suburb Property type Median price 12 month change in price
Minyama House $1.31m 45.8%
Kenilworth House $399,000 40%
Yandina Creek House $820,000 32.3%
Beerwah Unit $375,000 25%
Mount Coolum House $676,200 23.2%
Mapleton House $543,250 21.3%
Mudjimba House $739,500 20.7%
Peregian Springs Unit $475,200 18.8%
Battery Hill House $579,500 18.4%
Montville House $707,500 17.9%
Queensland is the next property hotspot, experts say
As New South Wales and Victoria continue to experience weakness. Queensland is expected to take the lead, a National Australia Bank (NAB) poll of property professionals revealed.
According to the survey, industry experts project house prices in Queensland to increase by 0.7% next year and 1.3% in two years.
Some areas seen to perform strongly over the next year include Brisbane, Cairns, the Gold Coast, and the Sunshine Coast. Out of the suburbs, Coomera and New Farm are expected to realize robust gains.
Meanwhile, Queensland’s rental market is also poised to enjoy an upward boost, growing by 1.3% next year and 1.9% in two years. This is despite the stricter rules on housing investment.
The respondents of the survey also expect Queensland to retain foreign buyer interest. In fact, the share of foreign sales hit a four-year high of 22.8% over the previous quarter.
The results of the survey go against NAB’s own projection of the market. For instance, the bank expects house prices to remain flat in Brisbane over the next three years. Unit prices, on the other hand, is seen to fall by 4.5% over the next year.
NAB chief economist Alan Oster said Brisbane’s housing market seemed to be going sideways and its unit market still creates concern.
“It hasn’t peaked yet, so that’s good. We’re seeing quite strong economic activity in Queensland, so that always helps,” Oster said, as quoted by The Courier-Mail.
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