The cost of living is more affordable in Perth and Western Australia than other major Australian capital cities, according to an independent report by Deloitte Access Economics.
The report, commissioned by the Department of Treasury, undertook a comparative analysis of the cost of living in Perth with other major capital cities of Sydney, Melbourne and Brisbane, and Bunbury with other major regional centres to help inform the WA Government’s strategy to attract and retain skilled workers to the State.
The report found that Western Australians benefit from significantly lower cost of living and high average household income relative to other parts of the country.
The analysis showed that the average Perth household spent an estimated $1,630 per week on the consumption of goods and services, including housing costs in 2021-22.
This was 24 per cent lower than Sydney ($2,143 per week), 19 per cent lower than Brisbane ($2,002 per week) and 10 per cent lower than Melbourne ($1,805 per week).
At the same time, Perth holds the second highest median household income at $2,027 per week, second only to Sydney with an average of $2,146 and higher than Melbourne at $1,958 and Brisbane with $1,962.
The Deloitte analysis shows the largest driver of the difference in cost of living between the capital cities is housing costs.
Average household spending on housing related costs in Perth was the lowest of the four cities at $480 per week, 38 per cent lower than Brisbane, 35 per cent lower than Sydney and 9 per cent lower than Melbourne.
For new residents entering the Perth housing market the difference is even greater. The mortgage payment on the median house in Perth is estimated at $499 a week – 58 per cent less than mortgage payments on the Sydney median house price ($1,179 per week), 40 per cent lower than Melbourne ($832 per week) and 34 per cent lower than Brisbane’s median house price ($761 per week).
Affordability is significantly greater in Perth, with mortgage payments on the median house price accounting for only 24.6 per cent of the median household income. This compares to much higher shares of income in other cities, including 55 per cent in Sydney, 42.5 per cent in Melbourne and 38.8 per cent in Brisbane.
For non-housing related costs, Perth also ranked well. This includes spending on non-discretionary items like food and non-alcoholic beverages, where the average Perth household spent 5 to 18 per cent less per week than households in the other three capital cities, as well as lower spending on a number of discretionary items such as recreation.
The Deloitte analysis also compared cost of living using a number of metrics between Bunbury, Newcastle, Geelong and the Sunshine Coast. Similar to Perth, Bunbury enjoyed the lowest cost of living of these regional centres.
Housing costs for Bunbury were the most affordable in terms of median prices and rents for both houses and units.
Food and fuel prices were similar to other major centres, while electricity costs in 2022-23 in Bunbury ($1,813) are likely to be comparable to Geelong ($1,800) but lower than Newcastle ($1,933) and the Sunshine Coast ($2,145). Accounting for the impact of the McGowan Government’s $400 Household Electricity Credit and credits in Victoria and Queensland, electricity prices in Bunbury would be 9 to 28 per cent lower than the other cities.
Motor vehicle charges were the lowest in WA at $904 per year in 2021-22, compared to $1,044 in NSW, $1,188 in Queensland and $1,386 in Victoria, mostly attributable to lower vehicle registration charges in WA. Separately, public transport charges for those living in the suburbs are even more affordable taking into account the new two-zone fare cap in Perth.
Easing cost of living pressures is a significant focus for the McGowan Government and already initiatives such as the affordable capped airfares for regional residents travelling to and from Perth are in place.
In addition, the McGowan Government continues to provide free Rapid Antigen Tests to all WA households through the free WA RAT Program, the only one of its kind in Australia. The program to date has provided households with savings on the purchase of RATs of at least $150.
Support to those that need it most is also provided through an Energy Assistance payment of $310.60 – combined with the $400 credit, this will provide some WA households cost of living relief for more than $710.
As stated by Premier Mark McGowan:
“The deep dive undertaken by Deloitte reinforces Western Australia as the most affordable and successful place to live.
“Western Australians enjoy some of the highest median household incomes in the country, and most affordable cost of living, particularly for housing and mortgage repayments, and other day-to-day expenditures.
“Throughout the pandemic, thousands of people have moved West, incentivised by our safe handling of the pandemic, the economic opportunities on offer and our great lifestyle.
“Not only do we have one of the best performing economies but also significantly lower living costs than other major Australian cities.
“In the current climate with international events impacting cost of living globally, the Deloitte report shows that WA is in a very fortunate position, making us a very attractive State to live, study, and invest.
“With a strong economy very much in need of more skilled workers, the benefits of living in WA highlighted in this report, provide another positive reason for people to move to our great State.”
