Melbourne is one of Australia’s most beautiful cities, and is just as popular among those migrating from abroad wanting to live there as it is among Australians who move into the city. Although living in Melbourne is 10% cheaper than living in Sydney according to the Expatistan website, it is still an expensive place to live.
What is Making Melbourne so Expensive?
As is often the case, increases in the cost of living have been driven predominantly by the housing market. In March 2017 Huffington Post Australia reported that the average house price in Melbourne is $943,100, while the latest data from the Australian Bureau of Statistics tagged year on year house price growth in the quarter to June 2017 at 13.8%, on par with Sydney and higher than anywhere else. Only Hobart came close to matching this number.
In addition to this, the costs of renting have surged along with the day-to-day cost of living. Eating out will cost you more than ever before, a trip to the theatre is more expensive in Melbourne than it is anywhere else in Oceania, while if you smoke it’s more expensive to buy a packet of cigarettes in Melbourne than anywhere else in the world!
The below image highlights exactly what you’ll pay for various things across Melbourne.
Information sourced from Expatistan, Cost of living in Melbourne, Australia, www.expatistan.com/cost-of-living/melbourne
What Does This Mean for Melburnians and Those Moving to Melbourne?
It’s difficult to escape the feeling that if you aren’t earning close to the Melbourne average of $82,784 that it’s probably going to be difficult to enjoy a sustainable lifestyle while still being able to save. The increased cost of living is likely why there are many from Generation Y that are turning away from the traditional Australian Dream of home ownership and instead are embracing renting and looking to live their own equivalent Australian Dream by maximizing their travel opportunities as well as other experiences.
At the same time, whether you live in Melbourne at present, are planning to move to the city, live elsewhere in Australia, and whatever your circumstances, thoughts, and ambitions around home ownership, there are plenty of opportunities for you to improve your lifestyle and make the modern cost of living less onerous on you and your family.
The Power of Budgeting
You should never underestimate the power of budgeting. Even if you don’t sit down and create a strict budget that you’re going to hold yourself to, or download a finance app to help you manage your money, you could save yourself a few hundred dollars a year just by looking at your bank account and cancelling those old direct debts or mobile phone contracts you didn’t realise you were still paying for.
That said, we definitely suggest you do it properly. When people sit down and look at what they’re currently spending each month, it is often quite frightening how big an opportunity there is to make savings. Even skipping coffee on your way to work one morning a week or making your lunch at home once a week can save significant sums of money in the long term.
Think about what you can do to reduce your own living costs. We’re not suggesting you completely give up your coffee or never eat out, but by cutting back you’ll find yourself with money to save or spend on something else that you might currently be missing out on.
If You’re a Homeowner, Renovate!
Spending money on home renovations may seem a strange suggestion for helping you to reduce living costs, but hear us out.
By investing in home renovations, you may increase the value of your property, usually by much more than the sum you paid to have the work done. The beauty of doing this is that you don’t necessarily need to spend tens of thousands of dollars, either. Sure, you can have your garden landscaped, install a swimming pool outdoors, or build an extension, but simply refreshing the interior décor or cleaning the external brickwork can make a big difference, and won’t cost you anything like as much.
With the money invested in home renovations, what’s the endgame?
Well, once your property is worth more, you’ll have more equity. You could then use this equity to invest in another property for you to rent out or for other investment purposes. If you rent out a second property you have the benefit of not only making an additional income, which will help you with living costs now, but with house prices not just in Melbourne but across Australia roughly doubling in value over a period of every 10 years you’ll significantly add to your net worth, too.
If you don’t have the money to renovate your home right now, consider taking out a home renovation loan from NOW FINANCE.
Learn New Skills to Get Promoted
If you’re not a homeowner and are quite happy renting, you don’t necessarily have to be priced out of living in Melbourne. One way to improve your value to your employer and open up promotion opportunities, or to enable you to see alternative employment – in both cases with a pay rise in mind – is to look to undergo further training or gain a new qualification.
The great thing about doing this is that you’ll have plenty of options, too. You might choose something very niche and specific to your current employment, or alternatively you could do something different or even look at an Open Universities Australia course. Although you will need to pay to attain your new qualifications, if they open up a range of new opportunities for you, and make Melbourne a much more liveable city for you once you’re earning more money, it will prove worth it in the end.
If you are looking to learn a new skill or gain a qualification, NOW FINANCE offers personal loans for education and career development expenses.
Making Melbourne More Liveable for You
What can you do to make Melbourne more liveable for you? From being smarter with how you budget your personal finances to looking at how you can earn more money, the cost of living in Melbourne doesn’t mean you’ll have to leave or will never be able to live there.
Consider what changes you can make and what opportunities are available to you, and look forward to taking advantage – or continuing to take advantage – of everything Melbourne has to offer.
Disclaimer: This article contains general comments and recommendations only. This article has been prepared without taking account of your objectives, financial situation or needs. Before taking any action you should consider the appropriateness of the comments made in the article, having regard to your objectives, financial situation and needs. If this article relates to the acquisition, or possible acquisition, of a particular credit product you should obtain and consider the relevant disclosure documents before applying for the product.