Calculate cost of living??

sudzs

Myself and mr. sudzs are considering a move to Australia. Visas and jobs all lined up but the stumbling block for me is the high cost of living I'm hearing so much about and whether or not it's worth the huge move.

I've been reading all the expat forums and I realise there is no point in doing a straight currency conversion to work things out. I did see somewhere on a UK expats site (we're in the UK at the mo too) that if you divide the Australian salary by 3, that gives you roughly the equivelant UK salary in terms of how far it would go to cover cost of living.

Would anyone think that's about right?

Apologies I'm sure this topic has been done to death, I have been looking through old threads too for info but just wondering if anyone might think the divide by 3 thing is at all usefull or not.

hussey

No that's a BS formula ... cost of living in Sydney is very high at the moment (since you have told us nothing about what you do, where you want to go etc.)

Unless you are on mega bucks in UK, then / 3 is a joke

sudzs

hussey wrote: »

No that's a BS formula ... cost of living in Sydney is very high at the moment (since you have told us nothing about what you do, where you want to go etc.)

Unless you are on mega bucks in UK, then / 3 is a joke

Fair enough, we'd be in Perth, main salary coming from senior management in engineering.

If we were on mega bucks in the uk, would the divide by 3 not be a joke?!

I'm just looking for a pointer to a very rough estimate as to what salary in Australia (Perth) would translate to one in the uk or Ireland to give a similar standard of living.

ellaq

I thought that they advocated dividing by 2.2.

We don't know your situation in the UK. How many people are living on that wage is probably the most important factor.

csm

The 2.2 figure for the UK was got by comparing the median salary between the UK and Oz. It's a fairly rough calculation and was probably done some time ago. Nevertheless, 3 is too high. Maybe if you were moving from, say, Manchester (low cost of living) to Sydney (high) then it might be about 2.8 (just guessing here) but Perth is low cost compared to the other capital cities in Oz. Why don't you find a recent estimate of median salary in Perth and the city you live in now? Divide Perth by the UK one and you'll get a very rough guide of cost-of-living differences.

I moved to Brisbane from Plymouth in January and I reckon 2.2 was a good estimate. Having said that, I was getting a fairly substantial raise too so I can't really compare my standard of living before and after.

You could do a cost of living calculation by looking up the cost of all the necessities online but that would be hugely time consuming. Anyway, if you're moving to mining central (Perth) and in senior management in engineering you should be getting a good raise on your UK salary I would have thought.

Zambia

Very simple rule of thumb is if you were on Good money in the UK you will be fine here.

The crux of it is do you want to live in Australia. Factor in a few things like what you will lose on the exchange rate bringing cash over and the equity in any property you have and if the figure is to high then it may be worth staying.

Do yourself a favour flick a coin heads Aus tails UK. When the coin lands gauge your immediate feeling. If the feeling is positive then thats your gut, go with that.

mandrake04

My Parents (live in the 6 counties) were visiting last month and they thought Australia was more expensive than it was the last time they were here in '05, I think its not much different ....sure its a slight bit more expensive on the Grocery receipt and electric bill than it was 6 years ago but that's expected its swings & roundabouts.... I am getting paid more.

The exchange rate is where you will see it especially in the ££

The rate in 2005

£1= $2.30
€1=$1.61

2011
£1= $1.49
€1=$1.32



I think 2.2 was a good comparison maybe 2 or 3 years ago but a bit dated now, also with this bloody Carbon Dioxide tax will put the prices up even more.

The 2 speed economy in WA is a bit dicey especially when buying property and I would not say that the cost of living in Perth is not much cheaper than Sydney.

Also read that the unemployment rate on the Goldcoast is about 13%, but that the government paste over it with a national unemployment rate of 4.9%

Plenty of people on BE.com & PIO whinging about they are struggling to achieve the lifestyle they dreamed about, but then they are coming from a far poorer country than it was maybe 4 or 5 years ago when they started the migration process.

ellaq

It really depends on your expectations of what your standard of living is going to be.

Houses are big here, and then you have to furnish them and heat/cool them. Cars are more expensive too. Running a swimming pool can cost an extra $100 per month or more. Add children to the mix and on it goes with school fees, sport, etc. The price of kids clothes and shoes here is horrific, we could really do with a primark equivalent. But wages are higher here too so it all balances itself out.

Perth is cheaper than Sydney for rents. But eating out in the Eastern States is cheaper than Perth, even going out for a drink here is more expensive. Same for groceries and even petrol.

Just like everything in life there are pluses and minuses.

sudzs

Thanks all for the brilliant and helpful replies!

csm, we recently moved from Plymouth to here in the East Midlands, in a market town around the size of Navan, maybe a litle bigger. Have to say I prefer it here, Plymout was so far from everywhere! (except Cornwall which we loved!)

Anyway, cost of living is cheap enough here so looking at rent, food, cars etc in Australia is a bit shocking! I know making the move to Australia is about more than the cost of living so I think we have to a lot more thinking and a lot more internet research I think...

Zambia, good advice with the coin flip! Haven't tried it yet!!

Thanks again for all the advice!

Jumpy

Dont forget that most places are Unfurnished.

sudzs

Jumpy wrote: »

Dont forget that most places are Unfurnished.

I know, thanks, same as here in the UK. Actually we just furnished a place here a few months ago.... including white goods It hardly makes sense to bring all that halfway around the world. :rolleyes:

Jumpy

Dont.

It costs more to get it off the boat and through customs than it does to get it across the sea in the first place.

Been there, done that.

csm

Why would it cost to get through customs?

That should only be if it's new stuff that costs more than $1000. Or if needed cleaning by AQIS or something. We brought all our stuff out and all it cost us was the $400 inspection fee. We cleared customs in a day.

Having said that, I think it's probably a good idea to sell everything and buy again here. We did it the other way and it was a bit of a pain waiting so long for our stuff. My company were paying though so we saved thousands by doing it that way.

Yeah Plymouth is miles from anywhere alright! I loved being so close to beaches though. It's a nice part of the world but was there for a little over 3 years and that was enough.

TKline

mandrake04 wrote: »

The 2 speed economy in WA is a bit dicey especially when buying property and I would not say that the cost of living in Perth is not much cheaper than Sydney.

The Perth and WA economy is wholly dependent on the mining boom, and therefore dependent on China. If China has a downturn then that expensive property could come down in value very fast, so I'd urge the OP against buying any house or unit at this stage.

Melbourne is the canary in the coalmine of Australian property, and it's one very sick yellow bird. Melbourne stock is building up alarmingly, and yet the builders just keep on building. There's a huge pipeline of units under construction and as they hit the market over the next 6-12 months we'll see a real estate bloodbath the likes of which have never been seen.

Auction results across Australia have totally collapsed and FHBs have deserted the market. Unbelievably the spruikers are still out there saying it's a great time to buy (but when do they ever say anything else). Of course, when the extent of this crash becomes obvious, they'll be nowhere to be seen!

The bottom line is this - beware the two speed economy, beware the China effect, and don't buy property!

Tom Kline.

GiftofGab

On average, how much did you guys spend a day while travelling in oz?

Mellor

mandrake04 wrote: »

My Parents (live in the 6 counties) were visiting last month and they thought Australia was more expensive than it was the last time they were here in '05, I think its not much different ....sure its a slight bit more expensive on the Grocery receipt and electric bill than it was 6 years ago but that's expected its swings & roundabouts.... I am getting paid more.

The exchange rate is where you will see it especially in the ££

The rate in 2005

£1= $2.30
€1=$1.61

2011
£1= $1.49
€1=$1.32

I think that's what people refer to when the say a place is expensive or cheap - the cost based on exchange rate.

When the euro was at its peak against the dollar, going out in Oz appeared cheap, now it appears expensive even if the priced hasn't changed much

mandrake04

Mellor wrote: »

I think that's what people refer to when the say a place is expensive or cheap - the cost based on exchange rate.

When the euro was at its peak against the dollar, going out in Oz appeared cheap, now it appears expensive even if the priced hasn't changed much

So is Australia now more expensive or is Europe just poorer?

hussey

mandrake04 wrote: »

So is Australia now more expensive or is Europe just poorer?

The cost of goods and living has decreased in a lot of places (Ireland) but while in Australia is still going up

Mellor

If my wages have stayed the same, and the prices have stayed the same then it hasn't changed. The fact that the euro went down doesn't affect the cost of living, only how people precieve it.


In reality, the CoL in europe has decreased due to the recession, and oz has increased slightly. But not in the scale suggested by the exchange rate. I don't know if its anything other than inflation

jank

Mellor wrote: »

If my wages have stayed the same, and the prices have stayed the same then it hasn't changed. The fact that the euro went down doesn't affect the cost of living, only how people precieve it.


In reality, the CoL in europe has decreased due to the recession, and oz has increased slightly. But not in the scale suggested by the exchange rate. I don't know if its anything other than inflation

The exchange rate is one thing though. Is anyone confident that the AUD/EUR rate will go back to preGFC levels? The high AUD is causing lots of problems for the economy here at the moment but it wont be going down too fast anytime soon as the Euro crisis still has another 2 years left in it and commodity prices will stay high as demand from China is still there.

Therefore we have to conclude that now is the new normal, forget FX rates of 2005 or 2006. Pointless discussing them.. and yes Australia is VERY expensive compared to the rest of the OECD. Ask your average American, German or Brit. What Australia really needs is a property crash!

hussey

jank wrote: »

What Australia really needs is a property crash!

A property crash and no job loses would be ideal
I want to buy, but after seeing what happened in Ireland, there is no way can shell out $400k + for an apartment, when 2 bed's are going for in dublin for 1/2 it

ellaq

I can't see the property market making a major crash here. Wish it would though. But it has slowly being dropping here in WA now for almost 2 years now. Looking at how my family live in Ireland on half the income which we make over here I seriously wonder which side has the better standard of living. I feel that since 07/08 everything has gotten much more expensive here and we seem to have less disposable income too. But looking at todays tax brackets in the newspaper it would seem of the extra $40k he is earning we are only seeing about $8k of that after tax and loss of family tax allowances. And that $8k is easily being swallowed up by the increasing prices across the board.

mandrake04

hussey wrote: »

A property crash and no job loses would be ideal
I want to buy, but after seeing what happened in Ireland, there is no way can shell out $400k + for an apartment, when 2 bed's are going for in dublin for 1/2 it

I agree I would like a medium sized 4 BR on 1/4 acre but am reluctant to risk it, am going to wait and see what happens.

But looking at Ireland with 40% crash 17% un-occupancy and 15% unemployment you would think it would be easy to pickup a bargin property... but it is only a bargin if you can afford to buy it in the first place. My brother is in a good postion over there as he basically owns his own house outright but he still wouldnt buy anything at bargin prices because its likely to sit empty and he would be servicing a loan without any return.

Legend100

jank wrote: »

The exchange rate is one thing though. Is anyone confident that the AUD/EUR rate will go back to preGFC levels? The high AUD is causing lots of problems for the economy here at the moment but it wont be going down too fast anytime soon as the Euro crisis still has another 2 years left in it and commodity prices will stay high as demand from China is still there.

We might not even have a euro in two years time

sudzs

csm wrote: »

Yeah Plymouth is miles from anywhere alright! I loved being so close to beaches though. It's a nice part of the world but was there for a little over 3 years and that was enough.

You weren't on the Langage project by any chance??!


Might be getting the chance to get out to Perth for a couple of weeks before actually moving over there longer term. Hope I can remember not to do direct currency conversions as a judge of the actual cost of living! Friends of a friend went over for a short contract and all they're still trying to get over the price of a pint!!

But still trying to weigh up financially if the move would be worth it...

csm

No I was working in one of the marine science labs there.

Yeah it'll be difficult to get your head around when you're out for a short visit and effectively spending euros. Always keep in mind the salary that engineers are on here though. It's generally huge and if you're on a 457 you get massive tax breaks. The skills shortage in engineering should not be underestimated.

I'd be very surprised if you found it to be a bad move financially. You should be able to get employers to pay for your relocation, your tax breaks on a 457 should effectively pay for food and accommodation (and the company may well do it anyway), the salaries are high and you'll be paid in AUD, which is a strong currency.

sudzs

csm wrote: »

No I was working in one of the marine science labs there.

Yeah it'll be difficult to get your head around when you're out for a short visit and effectively spending euros. Always keep in mind the salary that engineers are on here though. It's generally huge and if you're on a 457 you get massive tax breaks. The skills shortage in engineering should not be underestimated.

I'd be very surprised if you found it to be a bad move financially. You should be able to get employers to pay for your relocation, your tax breaks on a 457 should effectively pay for food and accommodation (and the company may well do it anyway), the salaries are high and you'll be paid in AUD, which is a strong currency.

Thanks for the encouraging words! I didn't realise there were tax breaks if you were on a 475 visa. Will google straight away for more info!

csm

It's on the 457 NOT the 475! At least, I don't think you can get it on the 475.

Look up the Living Away From Home Allowance (LAFHA). It's a tax break designed to compensate you if you are temporarily living away from your permanent home. A 457 is a temporary visa so you can claim the break while on it. Once you apply for a permanent visa you lose it. Ask potential employers about it. They need to be on board but it doesn't cost them anything so they should be OK with it.

sudzs

csm wrote: »

It's on the 457 NOT the 475! At least, I don't think you can get it on the 475.

Look up the Living Away From Home Allowance (LAFHA). It's a tax break designed to compensate you if you are temporarily living away from your permanent home. A 457 is a temporary visa so you can claim the break while on it. Once you apply for a permanent visa you lose it. Ask potential employers about it. They need to be on board but it doesn't cost them anything so they should be OK with it.

My mistake, it is the 457 we'll be on! :rolleyes: Thanks again!