Cost of living is a key factor that affects everyday choices—from where to live to how to budget for groceries, housing, transport, and more. For Australians, understanding the current cost of living landscape both within the country and in popular relocation or travel destinations is essential to effective financial planning.
Whether you’re comparing major Australian cities, considering a move overseas, or managing your household expenses, this guide breaks down core cost categories, highlights recent trends, and links to resources that can help you assess and manage your living costs more effectively.
How Cost of Living Is Calculated
Cost of living refers to the amount of money needed to cover basic expenses such as housing, food, healthcare, transport, utilities, and education. These costs vary widely depending on location, lifestyle, and family size. In 2025, global inflation trends and shifting housing markets continue to impact affordability for individuals and families in Australia and abroad.
Economists and financial institutions often use cost of living indices to compare expenses across cities and countries. These tools can help Australians understand the relative affordability of living in places like Sydney versus Melbourne—or compare moving costs between Brisbane and international cities such as Dubai or Paris. For detailed local insights, see our guide on the Cost of Living in Australia.
Comparing Australian Cities and International Locations
The cost of living in Australia varies significantly by city. Sydney and Melbourne remain among the most expensive, particularly for housing and childcare. Brisbane, Adelaide, and Perth offer more affordable alternatives, especially in terms of rent and transport. Regional areas may offer lower costs but often have fewer job opportunities or services.
For Australians considering a move overseas, it’s helpful to compare total living costs—rent, healthcare, schooling, food, and utilities—with local income levels and currency value.
For example:
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Cost of Living in Dubai: Higher utility costs but tax-free income
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Cost of Living in France: Affordable healthcare but high urban housing prices
Factoring in exchange rates, visa requirements, and availability of public services can help determine whether relocation is financially viable.
Essential Categories That Impact Living Costs
Each household will experience different cost pressures, but several common expense areas impact most people:
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Housing: Rent or mortgage payments are typically the largest monthly expense. Property prices and availability vary by location.
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Food: Grocery and dining costs depend on local prices, access to fresh produce, and eating habits.
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Utilities: Electricity, water, internet, and heating/cooling costs can differ based on climate, home size, and energy efficiency.
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Transport: Public transit, fuel prices, car maintenance, and insurance are key cost drivers—especially in areas without accessible public transport.
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Healthcare: Medicare and private insurance influence overall out-of-pocket costs for doctor visits, prescriptions, and emergencies.
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Education: School fees, uniforms, textbooks, and childcare can be significant, especially for private or international schools.
Understanding how these categories shift over time can help you adjust your financial planning accordingly.
Practical Tips for Managing the Cost of Living
To manage expenses more effectively, consider the following:
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Track your monthly spending and set realistic budgets
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Use cost comparison websites to find deals on groceries, utilities, and transport
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Explore public services and community programs for childcare, healthcare, and housing
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Reassess your subscriptions and discretionary spending regularly
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Consider relocating within your region to access more affordable housing
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Reduce energy consumption to lower utility bills
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Take advantage of tax deductions and government rebates where available
For more budgeting strategies and financial tools, visit the Remitly Personal Finance Blog.
FAQ: Cost of Living
1. What is included in the cost of living calculation?
Cost of living typically includes housing, food, transportation, healthcare, education, and utilities needed to maintain a basic lifestyle.
2. Which Australian city has the highest cost of living?
Sydney often ranks as the most expensive, primarily due to high rental and property prices.
3. How can I estimate my personal cost of living?
Use online cost of living calculators to input your location, household size, and typical expenses to generate an estimate.
4. Is it cheaper to live abroad than in Australia?
It depends on the country and city. Some places have lower rent and food costs, but may lack public services or charge higher utilities.
5. How does inflation affect the cost of living?
Inflation raises prices for goods and services, meaning households may need to spend more to maintain the same standard of living.