Living in Melbourne ‘getting cheaper’ — with a catch

The cost of living in Melbourne is falling, new research suggests, and the city has dropped out of a list of the top 20 most expensive places in the world to live. But there’s a twist.

Melbourne has fallen eight places in a list of the world’s most expensive cities to live in. Picture: Jay Town

Melbourne is no longer among the 20 most expensive cities in the world to live in, according to new research.

The city has fallen down the table of the most expensive cities in the world, a study by the Economist Intelligence Unit has found.

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The London-based research house caries out a global survey of living costs by comparing the prices of more than 150 goods in 133 cities twice a year.

After sliding eight places since the last survey, Melbourne now ranks 22nd in the group’s Worldwide Cost of Living index (see the table of Australian cities below).

Macca’s perspective.

Sydney has also fallen, by six places, but remains in the top 20, at 16th.

While all five of Australia’s mainland state capitals have slipped down the cost-of-living ladder, there’s a twist.

All the cities in the survey are benchmarked against the cost of living in New York. Researchers collect details of prices in each city for everything from food and clothing to transport and electricity costs.

They convert those prices to US dollars using prevailing exchange rates. That means fluctuations in exchange rates have a significant impact on the results.

Transport costs are among those factored into the Economist Intelligence Unit’s Worldwide Cost of Living index. Picture: Sarah Matray

In Australia’s case, the slide in the Aussie dollar over the past year has had the effect of pulling cities here down the global list.

While it means living costs here have improved theoretically — if consumers spent US dollars — it does not mean living costs have improved for most Australians.

A year ago, one Australian dollar was worth more than US77c. Now it is worth about US71c.

In a statement announcing the latest survey results, the Economist Intelligence Unit yesterday noted the impact of changing exchange rates.

“Exchange-rate volatility has meant that, while some notable Asian cities have largely risen in cost-of-living terms, many other urban centres in China and Australia have seen contrasting movements,” the statement said.

Melbourne is now ranked the 22nd most expensive city globally to live in. Picture: Jake Nowakowski

Singapore, Paris and Hong Kong share equal billing as the cities that cost the most to live in, according to the index results, with Zurich next on the table.

Among other Australian cities, Brisbane is ranked 41st after falling 15 places from the last survey.

Adelaide is 51st, down 21 places, while Perth is 64th after falling 18 places.

The cheapest city among those assessed is Caracas, in Venezuela. It fell one place in this survey, to 133.

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WORLD’S MOST EXPENSIVE CITIES

Ranking, change from the last survey

1. Singapore — No change

1. Paris — Up 1

1. Hong Kong — Up 3

4. Zurich — Down 2

5. Geneva — Up 1

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16. Sydney — Down 6

22. Melbourne — Down 8

41. Brisbane — Down 15

51. Adelaide — Down 21

64. Perth — Down 18