Cost of living in Australia compared to the US

by Mark Benson on January 7, 2010

in General Information

Living in Australia

Australia is very popular with US expats who are looking to start a new life in a foreign land where the weather is good, prospects are encouraging and the standard of living is comparable to their former homeland. However, with prosperity comes a price with the cost of living in Australia having been on the increase since around the turn of the century and the difference between the cost of living in America and the cost of living in Australia seemingly growing all of the time – but is this really the case?

So what are the main factors to consider when comparing the cost of living in Australia to the cost of living in America?

Property

One of the main factors you need to consider when moving to a foreign land is the cost of property whether you are looking to rent or you are looking to buy. Even though the trend of renting your home rather than buying it outright is still evident in America we have seen more and more US citizens acquire their properties. After peaking at around US$322,000 in the first quarter of 2007 the cost of the average home in America is now around US$269,000. However, it is a difficult to compare and contrast against the Australian property market due in the main to the massive divergences in price and quality of housing!

If you take the largest cities in Australia the average price of a property has increased from AUS$371,000 to around AUS$381,000 over the last year, a year which has seen perhaps the worst economic environment since the 1920s. Indeed many of Australia’s largest cities are seeing houses sell for well over AUS$1 million and there is a feeling that only the rich will be able to live in areas such as Sydney, Adelaide, Canberra, Melbourne and Brisbane, to name but a few, in the future. At the moment property prices compare very well to America but this may well change in the future.

Taxes

Australia has a taxation system which is very similar to that in the UK and compares relatively unfavourably to that in the US. However, the American system includes a federal tax rate and local taxes which can often vary wildly from state to state. There are also other issues to take into account such as healthcare which is state funded in Australia via a 1.5% tax levy while in the US there is no real comparable state healthcare system and private healthcare is being pushed on to the population.

However, it is also worth noting that the relative shortage of skilled workers in Australia has created a situation whereby incomes relative to the cost of living are rising in Australia compared to America which is giving those moving from the US the potential of a higher standard of living. It is worthwhile noting that again this can vary significantly depending upon employment skills and the area of the country in which you decide to live. At the moment the local spending power of citizens in the US and Australia is fairly similar but Australia is certainly on the ascendency.

Food and Drink

It is well-known that America has a relatively low cost of food and other essential items and this is no different when compared to Australia. When you consider that food in Australia can cost up to 2.5 times the cost of similar items in the UK and can be even more expensive compared to the US you begin to get a feel for the difference in the cost of living. However it must be said that the cost of the food you buy in Australia will depend upon the type of lifestyle you are looking to create for yourself and your income.

If you look at for example the cost of eating in a restaurant in America compared to the cost of eating in a restaurant in Australia it is markedly cheaper in America. The price of beer is also cheaper in America as is the cost of the likes of Coke/Pepsi and water. Again, it will depend upon where you visit for your meal but on the whole it is becoming more and more apparent that Australia can be significantly more expensive in many areas.

While in some cases it is difficult to compare like-for-like, on the whole it has to be said that food in Australia is more expensive than the equivalent products in the US.

Healthcare

As we touched on above, the cost of health care in Australia compared to the cost of health care in the US is very different. The Australian system is very similar to the UK NHS system whereby a 1.5% levy is charged on employment income to fund a state wide free health care system. This is at odds with the US system which is very much based on private health care, although changes are being made at the moment.

Even after the proposed changes to the US healthcare system it will still be more expensive to obtain health care in America compared to Australia. Whether the Australian government moves towards a private healthcare system in the future, or at least encourages some to make the switch, remains to be seen because the ever-growing population is placing more and more pressure upon government budgets.

Conclusion

The US has been renowned for many years as a relatively cheap country to live in and this becomes more and more apparent when you compare the current cost of living in Australia to the current cost of living in the US. Even after you discount the wild swings in the currency exchange rates the cost of living in America is still significantly lower than that of living in Australia. However, we also need to consider the benefits of living in Australia and the prospects for the Australian economy.

There is no doubt that Australia is a country which has grown significantly over the last 20 years with many people believing the best may still be yet to come. The population has quadrupled since the First World War, predominantly because of a fairly relaxed immigration policy, and the continuing influx of skilled workers is having a beneficial impact on the overall Australian economy. On the downside, the influx of foreign workers attracting relatively high incomes has placed pressure on the property market and prices have risen substantially since 2000.

You need to balance the cost of living in Australia against the cost of living in America while also take into account the standard of living, the weather, prospects for the future, healthcare and other everyday issues. Only then will you be able to ultimately decide whether a move to Australia from the US would be beneficial to your lifestyle, your employment prospects and ultimately your overall cost of living and level of disposable income.

{ 195 comments… read them below or add one }

Dareen Brown January 23, 2012 at 9:09 pm

The forum is not a good starting point – you can't compare both countries – it's like comparing South Africa to USA or Singapore to China.
Many things are better in the USA because of its economy size – which means lower cost of living – and that will never be the same in OZ.

As an immigrant myself – immigrants are able to do better in the US much faster and quicker – there is a common belief that immigrants are 8 times more likely to succeed in the US than locals – because they came from higher cost countries, and usually able to save more.

But many immigrants do not succeed in the US as well – due to language and cultural barriers.

As a personal experience, and as an "Aussie immigrant" in USA – I feel it is easier to make money in the USA – USA is a place for would-be business owners – good business culture, large market, lower cost and plenty of opportunities; and lower tax rate as well.

But "local Americans" don't know the difference – they have no idea life is much more expensive outside the USA – and whey they finally have a chance to live abroad, they come back with much better appreciation.

But like Australia, US is not a place for lazy people ( where no place is), you have to work hard and try hard – but when you do try hard – the reward is much bigger and yes, you can live in a very comfortable life in the US with $100,000 income a year – which is pretty much the minimum you need just to meet the essentials in Australia for a family of 4.

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Michael Brown February 7, 2012 at 6:04 pm

My general experience between the 2 countries are:

1. Cost of living: apart from healthcare – US is far more cheaper than Australia in pretty much everything
2. Healthcare: This is a mystery – in OZ, you still need private insurance as medicare's coverage is getting less and less. A good care will still cost around $3,000 to $4,000 for a family in OZ…and coverage is also limited.
3. Tax: Much higher in Australia – especially income tax, so an uplift in income doesn't mean much.
4. Income: Min. wage is higher in OZ, but mid-high level jobs pay much better in the US and much benefits. If you work on min. wages, OZ is better, but for waitresses – they get much better pay in the US once tips are added.
5. Property price: I won't even go into that, OZ is ridiculous expensive..

Source: My 20 years of living between the 2 places.

I love both countries, I can live in both places, I was born and raised in OZ. But in terms "value for money" if you want to call it, I have decided to live in the US, and use the money saved for my kids to get good education and also travel around, plus investments. Can't really do that in OZ, no spare money at the end of each month.

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Amelia March 1, 2012 at 5:40 am

I would follow your steps. Now husband has a stable job here. Just thinking whether I should move there. Everyday, I am very worried about my own retirement.

Australia is a really boring country. The gov't thinks their country is very popular, but not to people like us who use to live in singapore. I prefer lower taxes, more job opportunities and much better lifestyles.

I am already 40. Another 10 more years to accumulate my retirement fund. Not enough time to do so.

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Daniella February 13, 2012 at 12:29 am

It's interesting to see the results from US Green Card Lottery (Diversity Visa Program) which admits 50,000 Green Cards randomly each year. The number of Australians applying for it and received had been increasing every year. It used to be just a handful, it is now over 1,000 "successful" Australians receiving this every year.

Statistically speaking, it is about 1 in 30 chance, this means, around 30,000 to 40,000 Australians actually enter this program with interest in moving to the USA. This is also nothing compared to New Zealand, which has even higher success rate. In some countries like Nigeria or South America, as many as 1 / 10 of population applying moving to the USA in this program.

The rate is 50,000 over 5 million last year. So, that is very interesting. It shows that Australians understand the hardship in terms of living cost, so why not retain that life style but at a fraction of the cost – and you can do so by living in the US.

Our living cost here is now 70% less than what it used to be in Australia..which is very big, we are on the way paying off our mortgage in the US now, as opposed to just paying the interest in Australia…people compare about salary between the 2 countries, the skilled professionals actually get better salary in the US, plus they also get insurance, and much lower tax rate, plus, you can offset tax with your interest on your own home..

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ll cool j February 14, 2012 at 11:36 am

not
a complaint it’s reality Australia is so damn over priced …highest utlilty bills ,petro.food, white goods .ever damn thing ..ah but the health care system well you truly pay for it in other ways .. love a Australia but hate it’s over priced life style transpotation ,cars ever thing is over the to top much perfer the low cost of the states .. the lucky country .. wrong

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Irish Mike May 1, 2012 at 10:18 am

I am a Civil Engineer who has been living here in Australia for 4 years. In that time, I have time I have seen the cost of everything escalate scarily. I earn a pretty good salary, but I don't know how people earning even the median can survive. What I've seen here is that there is a growing greed which is destroying all I love about Australia. Whats worse is that I've noticed growing undercurrents of racism, especially against Indians. I'm looking to move from Australia to either Canada or the USA, what is life like there for families? Is there work for Civil Engineers? I'm really worried for the future of my two sons, I don't want them to be sucked into the increasingly feral sub-culture that is evolving here.

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Nad June 2, 2012 at 12:26 am

It is better to live in an expensive country, where you are proud to be one, like an australian. but in USA you are called, hypocrite, arrogant and racist. I have a GC and live there for quite sometime and now planning not to comeback.

These are the things you have to know before moving to USA, I cannot say about economic condition because obviously it is cheaper in USA, but consider these facts

1. They have this stupid SSN that your life depends on. In this internet world, this number can be easily hacked, so watch out.
2. Gun Crazy assholes especially whites are everywhere, they just go crazy anytime and shoot you. Go get a gun and learn to shoot it to protect yourself and your family.
3. RIpoff telemarketers, bogus debt collector and people everywhere wants to rip you off, be careful, they are experts in those trades, that is why a lot of them are rich.
4. They have lots of enemies from other countries because of their hypocricy and their love of war. so be careful when you travel.
3 Lastly, learn to speak Spanish, because for some reason this country speaks spanish, you will hear them everywhere, phones, tv, markets, etc. and be prepared to be discriminated if you don't speak that language.

I have too many things to say, but above are just the main one, that will affect you most.

Money is not everything.

I still prefer Australia, my adopted country, I will fight for her.

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Bored Oz June 2, 2012 at 2:46 pm

Australia will never be like US. The govt here is VERY greedy and forever taxing people with their unreasonable taxes just meet their budget. Everything here is expensive. I find Australia is really backward. This country has ridiculous trading hours restriction. these days in order to be in the globalisation competition, you should never have restriction trading hours laws. But, Australians' mindsets are backward. All they care is not working and enjoy the lifestyle. It is so ancient the way they think here. The present govt here is worst. Jobs are limited here as well. I live here close to 6 years, and I still regret coming here… I should have gone to america where the opportunities are abundance. Americans love spending where as Australians are conservative and they hate spendings.

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Hafiz October 3, 2012 at 4:27 pm

Aussie really need to put things in place because people are really undergoing some economical stress for the next generation everything in Australia is very expensive especially Sydney which is known as the centre of Australia , if it continue this way I think there will be more homeless than any country in the world. I like Australia .

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jess December 4, 2012 at 12:14 am

I am Aussie wanna to live in US.

I am plan either looking for Job, or open small business, web design area.

How can I do this legally?

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boring oz February 9, 2013 at 11:22 pm

i don't like australia. don't think i will ever like here… it's a country very much like a third world countries. nothing is exciting for us here, practically nothing. we are so damn bored here. shopping hours is only from 7 to 5. no variety. australians are boring people. shit, i just wonder why i move here.

once we can get jobs elsewhere, we will move out from here. it's a god damn boring country. unless the govt knows how to change. but i doubt it will ever change for the next 10 years… good luck australia, u will be forever down under and forgotten

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bob March 13, 2014 at 11:53 am

I have been in Australia for about 8 years previously from the uk
and since I have been here in this short time I have seen the fuel prices go from 72c a liter to $1.60.
and everything else has gone up just as much the government is taken this country really down under, I love everything else about this place except the cost off living Australians are too laid back and will take all the price hikes on the chin.
as for that I am really interested in moving to usa but I have never been any recommendations?

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