Why Australia's still the world's most expensive place to live

Patrick Begley, Luke Malpass
Australia - the football champion of Asia, recent victor at the Cricket World Cup - has just taken out a less-coveted gong: most expensive country. Again.

Deutsche Bank, in its fourth annual Mapping the World's Prices report, found for the fourth year in a row that a buck in Australia brings the least bang. Australians, topping the purchasing power parity index, pay $1.12 in their currency for what Americans can obtain for one dollar of their own.

Getting from A to B on public transport costs more in Australia than anywhere else. So does buying a pack of cigarettes, while accommodation in Sydney is especially exorbitant.

The United Kingdom was rated the third most expensive country, while New Zealand came in second as its currency nears parity with the Australian dollar.

The United States has been the cheapest among developed nations. But the report found  "the strength of the US dollar has significantly narrowed the gap" between the US and Australia.

The Australian dollar has fallen 18 per cent against the US dollar over the past year, fetching US76.67¢ on Thursday. The US Federal Reserve is mulling an increase to interest rates that would send investors looking for higher returns back to the greenback.

Exchange rate changes also mean "shopping in Europe and Japan now feels a lot cheaper than before".

Sydney, along with Paris and London, was ranked as one the most expensive places in the world for a weekend getaway, mainly due to high hotel room prices. A Sydney five-star hotel room is more than twice the price of one in New York. In comparison, Melbourne was a cheap stay, costing about 70 per cent as much as New York.

The US is the cheapest place to buy an iPhone 6 while German MBA programs are the best value: "the fees are a third of US levels but salaries offered to graduates are 80-85 per cent of US levels".



Melburnians and Sydneysiders pay more for their cigarettes than anyone else in the world; for every pack, 70 per cent of the cost is paid to the government in taxes.

Residents of Moscow, Jakarta and Manila, meanwhile, pay just a 10th of the cost of a pack in the US.



Also encouraging good health in Australia is the low cost of gym memberships, which are much cheaper in Sydney and Melbourne's central business districts than those in the US.

But a pair of trainers was more expensive, though nowhere near as much as in France, Germany, or China.

For those looking for an inexpensive romantic outing, choose Indian. Mumbai and Delhi are at the top of Deustche's refined "cheap date" index, while Rio de Janeiro and Mexico City also earned a mention. Tokyo, Wellington and San Francisco were among the most expensive nights out.

Big Mac fans should avoid Latvia, which topped the famous burger index, as well as Lithuania and Norway.

Deutsche Bank Australia chief economist Adam Boyton, who was not an author of the report, said Australia was expensive because "we've gone a very long time now without a serious economic slowdown".

"In the absence of that, prices have drifted higher over time," he said. "The surge in commodity prices that had underpinned our economic performance meant we really didn't have to be efficient. We could just rely on getting paid much more to do the same thing."

Mr Boyton said he wanted to see more of a focus on competition policies such as those recommended in the Harper review, handed down this month. It proposed fewer rules around taxis, hotels, pharmacies and retail opening hours.

Deutsche compiles its list using internet prices as well as secondary sources. It warns that its map gauges prices but not affordability "in comparison to local purchasing power".

AMP chief economist Shane Oliver said some immediate respite would come from further falls in the Australian dollar. Dr Oliver expected an interest rate increase by the US Federal Reserve plus rate cuts from Australia's Reserve Bank would push the Australian dollar below US70¢.

"That's another 10 per cent decline which will further narrow the price gap between Australia and the US," he said.

But Dr Oliver warned currency decline would eventually bring lower living standards and that Australia needed to create more labour market flexibility to drive down prices.

"We've dropped the ball in the last 10-15 years," he said.

You can check out the full report here.

longweekend58 wrote on Jan 11^th, 2017 at 11:12am:


i certainly deride being "stuck in your own head" and i deride "thinking' as a substitute for taking "massive action, observing the consequences of your massive action, recalibrating your position and repeating the cycle.
the way to move forward is to use the world as a giant social laboratory , try stuff out and then learn the lesson

the way to stagnation is to accumulate knowledge and never use that knowledge by taking action and testing it out. if you just accumulate knowledge and do not use that knowledge, you will be punished.

and , as i have said many times, the creative industries are recognising the importance of meditation (which is the absence of thought) as the pathway to creativity.

the world is a paradoxical place

Ajax wrote on Jan 11^th, 2017 at 4:42pm:


We let them. It's no use blaming our representatives - they represent us. We can't be fagged, like the Americans couldn't be fagged until November 2016.


But the West is turning. Trump is either a final flare-up before it all sinks or he is a turning. If the latter, the hol Western worl is turning. Not BECAUSE of Trump but because the energy he harnessed. It's either a transformative energy or a final flash in the pan before it all burns out and the primitives return, after a couple of short centuries of civilisation.

The only chance Australia had for greatness and true independence in the past was the 1972-75 era under Gough Whitlam where Australia, for the first time ever, started to express a political stance and foreign policy that was independent of USA and UK.

Sadly, Uncle Sam didn't like it and financed a political coup against Whitlam and reintroduced Liberal puppet governments.