This week on Cheques and Balances, we answer a listener question, is it cheaper to live in Australia than NZ? We crunch the numbers!
The Brain Drain
While it’s no surprise for Kiwi’s to move over the ditch for an OE, to further their professional career or experience something new, Covid 19 lockdowns have definitely accelerated this desire. On average, around 20,000 Kiwi’s move to Australia every year, this is forecasted to increase to an alarming 50,000 this year. The reasons for moving vary from a delayed OE, to housing affordability and more opportunity. So we thought we’d crunch the numbers, is the grass actually greener? For this study, we compare Auckland with Sydney as comparable cities.
The average net salary in Sydney is $6,630.46 a month, the average net salary in Auckland is $4,433.29 a month. This is a 49.56% salary increase for the same or similar job in Sydney.
While this is a significant increase, it’s important to note that Australia has a different taxation system and it’s worth looking into what taxes apply to you in Australia.
Renting a 1 bedroom apartment in Sydney’s CBD is around $2,763.42 a month, to rent a 1 bedroom apartment in Auckland’s CBD is significantly cheaper at $2,055.43 a month. Auckland CBD is 25.62% cheaper to rent than Sydney CBD.
What about in the suburbs?
Renting a 3 bedroom apartment outside Sydney’s CBD is $3,334.16, renting the same or similar apartment in Auckland is $2,958.03. This is 12% cheaper than Sydney.
What about purchasing a house?
The Sydney median house price is $1.59 million, whereas the median house price in Auckland is $1.15 million. While Auckland has seen a bounce in house prices, Sydney has seen an equal, if not more significant house price increase which is reflected in the 38.26% higher median house price in Sydney.
Mortgage interest rates
A 1 year fixed term interest rate in Sydney is 4.29%. The same rate is 5.45% in Auckland at the time of this recording.
Cost Of Living
Basic utilities are relatively similar with Sydney costing around $203.98 a month and Auckland at $213.39 a month. Internet is slightly more expensive in Sydney than Auckland.
Vehicles are cheaper in Sydney, with a Volkswagen Golf 1.4 90KW Trendline costing around $32,174.44, with the same vehicle costing $37,000 in Auckland.
Groceries are 4.26% more expensive in Sydney while eating out at restaurants are 11.4% lower in Sydney than Auckland. A mid range supermarket bottle of wine will cost $16.36 on average, with the same or similar bottle costing $15.00. A McDonald’s combo will cost $12.87 in Sydney and $14.00 in Auckland.
There are some extra considerations to take into account if looking to compare Australia to New Zealand:
Capital gains tax – If you sell assets during the year, such as property or shares, you need to work out your capital gain or loss for each asset. There is currently no formal capital gains tax in New Zealand (although Bright-line tax can be interpreted as a form of capital gains tax on property)
Tax rates – Note there are different tax brackets and rates in Australia, it is worth checking your tax obligations when making comparisons between Australia and New Zealand.
Superannuation – Australia’s superannuation provides certain tax benefits to members while New Zealand’s KiwiSaver provides no special tax benefits and is treated much like any managed investment fund.
While New Zealand is extremely safe when it comes to poisonous or venomous animals, Australia is known for it’s dangerous animals and wildlife.
James prefers Auckland, Michael thinks the opportunities are outweighed in Sydney. Fact is, it depends on your situation and your goals. Have a request for a podcast topic? Ask us via Facebook or Instagram!
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