Living in Australia and New Zealand Cheaper
Weaker currencies mean Australia and New Zealand now offer would-be British newcomers better value than they did just a few months ago compared to Canada, the USA, France and Spain.
The Economist Intelligence Unit says the relative cost of living depends on two factors – local prices and exchange rates. The global financial crisis has seen some currencies, such as the US dollar and the Japanese yen strengthen, while others such as the pound sterling and the Australian and New Zealand dollars have weakened.
Sydney, which was the 17th most expensive most city in the list last year has moved to 35th place and Melbourne has dropped from 24th to 39th place. Brisbane and Perth have moved from 35th equal to 57th equal while Adelaide has fallen from 48th to 72nd. In New Zealand, Auckland, which was the 49th most expensive most city in the list last year has moved to 78th place and Wellington has dropped from 55th to 80th place.
The most startling example of a weakening currency has been observed in Iceland, whose debt-ridden banks have brought the country’s finances to insolvency. Iceland’s capital, Reykjavik, was the fifth most expensive city last year. Now it has fallen to 67th place.
A weaker British pound has lowered the relative cost of living in Britain and London has dropped from eighth to 27th most expensive city.
Jon Copestake, editor of the report, comments: “Two factors drive the relative cost of living: local prices and exchange rates. Normally our ranking of cities by cost of living is relatively stable, but in the current global climate changes in exchange rates have significantly altered our assessment of the most and least expensive cities.”
Cost of Living Comparisons – Most Expensive First
| Position | City | 1. | Tokyo, Japan |
| 5. | Oslo, Norway |
| 9. | Geneva, Switzerland |
| 10. | Singapore |
| 21. | Lyon, France |
| 23. | New York, USA |
| 27. | London, UK |
| 35. | Sydney, Australia |
| 39. | Melbourne, Australia |
| 46. | Vancouver, Canada |
| 53. | Dubai, UAE |
| 57. = | Brisbane, Australia |
| 57. = | Perth, Australia |
| 57. = | Toronto, Canada |
| 70. | Manchester, UK |
| 72. | Adelaide, Australia |
| 78. | Auckland, New Zealand |
| 121. | Johannesburg, South Africa |
Note: The Worldwide Cost of Living survey compares the cost of living in 140 cities worldwide. In each city field researchers gather and return a range of prices for over 160 items, from a loaf of bread to a luxury car.
I am so fed up with the continual winging of the Little Englanders, stirred up by the Media. I ...
while staying abroad do we have to inform British consulate there? How long a naturalised citizen can stay outside uk? 
One should have the right to live anywhere in the world and remain a loyal british subject, just as i ...
I worked and paid tax and NI for over 40 years I was never unemployed and never claimed any sort ...
my husband worked for the same company for 45 years paying tax and NI, i worked for 35 years only ...
Comment by StanleyS on 13 March 2009:
Aus and NZ currencies are going to strengthen so expect to see the next Economist report showing their cities have become more expensive.
Headline interest rates in Australia/New Zealand are around 3 to 3.5 percent compared with US/UK at close to zero percent. NZ’s Reserve Bank says there won’t be much more in the way of interest rate cuts there.
Aus/NZ governments were running big surpluses in the last few years unlike UK/US which have been running deficits.
Aus/NZ have no need for Mugabenomics – so called quantitative easing. The US and UK governments, however, are more or less insolvent. The whole point of “quantitative easing” or “printing money” is to bring about inflation to diminish the real value of the borrowings they have undertaken. They don’t care that, in the process, they will destroy the savings of the people who have behaved responsibly and saved for a rainy day.
Keynes famously said that “the markets can stay irrational longer than you can remain solvent” but the US dollar now has a long way to fall and there’s no reason to expect the sterling to strengthen against the Australasian currencies – expect the contrary.
Comment by WealthCrash on 15 March 2009:
I agree with StanleyS about the Aussie and Kiwi currencies strengthening against the US dollar and probably against the pound too.
I wish people would stop describing quantitative easing as Keynesian though. (I know StanleyS didn’t but a lot of writers are). The basis of Keynesian economics is that when the economy is growing, the government should run a surplus. If there’s a recession the government should then be in a strong position to borrow money to boost the economy. When the recession is over and the economy is growing again, the debt can be repaid.
For the last few years the Aussie and Kiwi governments have run surpluses so they are legitimately able to borrow money now, if they choose to. The US and UK governments, by way of contrast, ran up enormous debts while their economies were doing well and they had no reserves for the bad times we’ve run into now. They borrowed too much in the good times and they’re borrowing even more in the bad times. This is not Keynesian, this is insane.