Both Sydney and Melbourne now have the dubious honour as two of the top ten most expensive cities in which to live.
And while some media outlets are having a field day with the negative implications; the rising cost of living, more families struggling financially, households increasingly experiencing mortgage stress and so on; I prefer to look at the glass as being half full.
Firstly lets understand what they were measuring…
Last year the Worldwide Cost of Living 2011 Survey, conducted by the Economist Magazine’s Intelligence Unit, looked at “point of sale” prices for more than 160 everyday consumer items in 140 major cities around the world, and then ranks each city according to its cost of living.
According to this study, Sydney and Melbourne ranked sixth and seventh respectively, while Perth and Brisbane just failed to make top ten status, coming in at 13th and 14th place. This is in stark contrast to a decade ago, when Sydney and Melbourne were ranked as the 71st and 80th most expensive cities, and Perth was in the 91st position and Brisbane was 93rd.
There are two major reasons why a city’s cost-of-living index will change over time: exchange rate movements and price movement. The report explains that the remarkable rise in the cost of living in Australian cities over the last decade, came at a period in which the value of the Australian dollar has moved from around 50 US cents to passing parity with the US dollar.
Essentially, if the local currency strengthens or inflation pushes up the price of goods increase (both of which have occurred here since over the last decade), the relative cost of living will also rise.
There’s no sugar coating it… the cost of living and property prices are expensive in Australia, but for a good reason when you consider our general economic wealth, our ever expanding population and all the new development struggling to keep up with the escalating demand.
However rather than focusing on the prospect of paying more for the Australian way of life (which, let’s face it, won’t change the price of our groceries or real estate), perhaps we should take a different perspective.
You probably believe in the old adage – you get what you pay for – right?
So doesn’t it go without saying that if you want to live in what most people perceive as “the lucky country”, then you’re going to have to be prepared to pay for living in the best place on the planet!
In other words, our higher standard of living comes at a premium. For the privilege of enjoying our relatively clean environment, low unemployment, stable economy and larger homes clustered around major coastal cities, we need to be prepared to pay more.
Interestingly in a different report by the Economist Intelligence Unit, their Global Liveability Survey, Melbourne was ranked the best city in the world to live. And not surprisingly other Australian cities in the top 10 include Sydney (ranked 6th) andPerth and Adelaide (ranked joint 8th.) while Brisbane lagged the other Australian cities ranking 21st.
Now while we might feel a little hard done by and on occasions whinge about the significant increase in house prices, rents and our grocery bills, consider the residents of those countries that came in last.
Would you really like to reside in the likes of Pakistan’s Karachi; the cheapest place to live and work where the cost of living is less than one-third of that of Tokyo? Or what about the infamous Indian cities of Mumbai and New Delhi, where poverty is rife and the rate of homelessness is through the roof?
Rounding out the bottom ten on the cost of living index are cities dotted throughout the troubled Middle East and North Africa, with the low cost of living in these parts driven by a mix of weakened currencies, low levels of development and, in some cases, price controls and subsidies in staple goods.
For me, there is no question that we are indeed a very lucky country – many would even suggest we are “spoilt”. After all, we enjoy a glut of wide open spaces, comparatively clean beaches, jobs for those who want to work, homes with all of the modern conveniences we’ve come to expect, excellent investment opportunities there for the taking and a world leading economy.
At the end of the day, I guess you really do get what you pay for!
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