Of all the places that UK citizens emigrate to, Australia has been a popular destination for a very long time. The lure of a hot climate, better jobs and a higher quality of life has swayed thousands of UK citizens and families to emigrate each year, and between 2005 and 2010, over 100,000 people arrived in Australia from the UK. The idea of emigration to Australia is in the British psyche, and there is even a BBC reality/lifestyle television program that assists people considering a move from the UK – “Wanted Down Under”.
However, over the last few years, net migration from the UK has slowed down and migration back to the UK from Australia has increased, and while cultural factors are definitely involved, the high expense of living in Australia – especially in the most desirable places to live such as Sydney – is becoming a very significant factor in itself. The common consensus is that Australia is something of a haven from the economic downturn currently facing Europe, but what are the true costs of living down under? The bottom line – it has become far more expensive to live in Australia now that it was five years ago in terms of both housing and living expenses. This guide breaks it all down.House PricesHouse prices in Australia are currently some of the highest in the developed world. The country’s economy has been resilient in the wake of the global economic crisis and this is exemplified by its strong housing market. While analysts predicted a big housing crash a number of years ago strict lending standards, low mortgage rates, housing shortages and high demand fuelled by immigration have prevented this crash. House prices have in fact risen by almost 10% since 2007, and the result is that today 75% of Australia’s housing markets are rated as ‘severely’ unaffordable. Many people are blaming ‘urban consolidation’ or the restriction of urban spread for the high prices.
The way to compare house price affordability is to look at the ratio of median house prices to median annual household income – the Median Multiple. Anything below a ratio of 3 is classed as affordable (in this case the house price would be three times the yearly income). In the 1980s, the average affordability ratio was in this range (except for Sydney), but today the average is 5.6, and there’s a higher ratio of 6.5 in the large cities. The highest rate is The Sunshine Coast, with a ratio of over 8. Compare this to the United States where 100 of 216 housing districts are around 3.0 following the housing crash, and the UK where the average is 5.1.
In contrast to Australia, UK house prices have dropped in the last few years, and though it all depends on where you buy and how much you are earning, it is safe to say it is now more expensive to purchase in Australia. Given a typical move, you would have saved e4roughly 36% in 2007 for selling in the UK and moving to Oz for a similar property, but now you would actually lose 5.5%. The UK has always been known for high house prices, and the fact that Australia has overtaken the UK is a sure sign of higher expenses. And if you think you can avoid higher house prices by renting instead, you would be wrong. Renting in Australia is on average 78% more costly than renting in the UK.Living Expenses
Living expenses are decidedly higher in Australia than the UK. On average, consumer prices are 31.9% higher in Australia than the UK, and 20.42% higher in Sydney than in London. The biggest difference in living costs lies with groceries – especially the basic commodities like milk and bread – which are 40% higher in Australia. Restaurant prices are not quite as bad, but still as much as 25% higher than in the UK. If you went out for a meal with your partner at your average restaurant, in the UK it would cost you an average of £40, but in Australia it would cost you over £50.
Even though it is more expensive to purchase in Australia on a day-to-day basis, Australians still enjoy better purchasing power than the UK, which is mainly due to low interest rates and steady/rising employment income.Which is More Affordable?
Housing and living expenses are very important, and while it is currently more expensive on average to buy property and to purchase products in Australia, there are a few positives. The main benefits are reducing interest rates, which is good because salaries are high, steady and increasing. If you are moving from a major UK city like London to a cheaper Australian city, then you can make life more affordable for yourself as long as the housing Median Multiple is below the average. But in this case, you should not expect to get the location and quality of life you were dreaming of.
The Australian Government does provide some benefits including financial help for first-time buyers. If your heart is set on Australia and you plan on living there for the long term it is a good idea to use savings for a mortgage, as if you have less than a 20% deposit you will need to pay Lenders Mortgage Insurance (LMI) which can be very costly, and of course will allow you to have a lower interest rate which will help you to pay off your mortgage sooner.

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