Has Global Uncertainty Changed Cost Comparisons Between Australia and New Zealand?

With the continued decline of the U.S. dollar and Europe on the brink, have cost of living comparisons changed? According to Mercer, whose annual assessment of living costs in cities around the world is the most thorough and in-depth of its kind, the answer is no. While costs have risen in both Australia and New Zealand over the past year, Australia remains more expensive in the 2010/2011 study.

Mercer’€™s survey compares costs of both major and minor expenses, from housing and food all the way down to a cup of cappuccino. It also compares specific cities rather averaging costs together. Booming, glamorous Sydney remains the most expensive area in either country, followed by Melbourne, Perth, Brisbane, Canberra and Adelaide. All of these ranked among the world’s 50 costliest cities, while Auckland, New Zealand’s most expensive, barely made the top 150, coming in at 149 with Wellington and Christchurch behind it.

Of course, no survey can account for individual choice or factors such as the number of children at university. Anyone thinking of moving should do a work-up of both necessary costs (such as housing and transportation) and flexible costs which are adjustable and might be traded for a more desirable lifestyle.

Perhaps the biggest part of the equation is individual income. While surveys can help track money flowing out, they don’t address the question of money flowing in. For example, the Australian dollar generally trades higher than the New Zealand dollar, so New Zealand looks like a bargain to anyone used to Australian dollars. And it is a bargain if one is living there on Australian dollars. However, New Zealand wages have stagnated over the past few years, reducing the ‘œbargain’€ factor for anyone who will be paid in New Zealand dollars. Wherever possible, use the real numbers you will be working with and be realistic about income, expenses and priorities.