Sydney has been labelled the third most expensive city on Earth, behind Tokyo and Osaka, according to the Economist Intelligence Unit worldwide cost of living index 2013 – but two local brokers say the ranking could actually be a good sign.
According to the report, the prices of wine and unleaded petrol have both tripled in the last ten years, bread has more than doubled and cigarette prices have nearly quadrupled.
Intelligent Finance managing director, and life-long Sydney resident, Justin Doobov, says the city’s ranking doesn’t come as a huge surprise.
“If you look at most other countries, they’ve got massive job losses and the average person is really struggling…While the cost of living here has gone up, it shows we’ve got a more buoyant economy and Australians still have the ability to consume, as opposed to other countries where prices have dropped.”
Doobov says he hasn’t personally noticed any dramatic prices changes, other than in the local property market.
“That and petrol, but everything else seems to have gone down. Anything that’s imported seems to have dropped in price in the last ten years. Things that need on-shore labour, such as restaurants and the cost of eating out, housing costs, anything that uses Australian labour has increased in price.”
Fellow lifetime Sydney resident, Smartline broker Kim Wight, agrees – though she was surprised to find that her home-town came third in the world.
“I would have thought places like New York or London would have been before us. I would have thought we’d be up there, but not third.”
Wight says she’s noticed her own living costs go up, but says that has more to do with life-style changes than with the cost of goods and services, though she has noticed a major increase in the cost of maintaining a car.
“I think [living costs are high] because we expect a very high standard of living. You can’t compare us to other areas of the Asia Pacific because the way we want to live is very different. We expect to have an investment property and holidays and two cars – my clients aren’t happy with just owning a home and paying that off over 30 years, they want to buy an investment property.”
She says the study should also have taken into account the fact that wages in Sydney are higher than in many other cities world-wide, which may compensate somewhat for the higher cost of living.
Doonov says people he deals with who live in the western suburbs, or those who have lived outside of Australia and are coming back often comment on the higher prices, but that many Sydney locals may not have felt the hike as a dramatic hike in prices.
“It’s a bit like boiling a frog in hot water, you don’t notice the change because it happens so steadily.”