Australian cities becoming relatively cheaper for expat workers

Global human capital consultancy Mercer has released its latest annual global cost of living index, with Sydney unsurprisingly once again found to be the most expensive city in Australia for expats.

Perhaps one surprise though: Adelaide has now almost overtaken Canberra and sits ahead of Perth on the list, with the three cities together with Auckland all grouped between 106th and 111th spot on the global rankings.

Sydney meanwhile landed in 58th place, followed by Melbourne and Brisbane at 73rd and 89th, with, perhaps as another surprise, every Australian capital deemed to have become relatively cheaper since 2023.

To compile its rankings, the consultancy altogether assessed 226 cities across every continent on the comparative costs of more than 200 items, including food, housing, transport, entertainment and some non-essentials such as the local price for a pair of blue jeans. Consistently at the top of the list over the years, Hong Kong, Singapore and Zurich again took out the top three places.

The biggest year-on-year movement in Australia was in Canberra, which fell twelve places to 106th and was overtaken by the likes of Lisbon, Kingston and Vancouver to now sit just one spot ahead of Adelaide. Meanwhile, the cheapest place for foreign employees in Oceania was Wellington, which at 145th is supposedly more affordable for living and working than in Manila and Mumbai.

Still, for those Downunder struggling with the cost-of-living pinch and feeling a tad aggrieved about the nation’s cities being declared more affordable than ever compared to dozens of places abroad, Sydney was at least noted for its coffee prices rising by almost a quarter, behind only Buenos Aires and Istanbul, while the price of haircuts, eggs and olive oil were also on the rise.

Casting back just six years ago, Sydney was ranked globally at 29th (after falling five spots), while Melbourne and Perth were 58th and 61st followed by Canberra, Brisbane and Adelaide. While Mercer has increased the number of cities studied since then, and inflationary pressures are a worldwide phenomenon, it’s unclear what has caused the fluctuations within Australia.

It’s possible though that the consulting sector may have itself played a part. Adelaide has in recent years boomed as a technology hub, luring the likes of Cognizant and Accenture among others to establish dedicated centres in the city, in turn attracting staff from interstate. Meanwhile, the federal government in Canberra has been on a dedicated mission to reduce its reliance on consultants.

The reduced bill for foreign workers in the capital has also placed Canberra on the cusp of the sweet spot for cost vs quality of living considerations, with the city having been ranked 28th globally by Mercer in the latter category toward the end of last year, including number one for sustainability. This was also the case for Auckland, which ranked 3rd for quality of living and 111th for cost.

Mercer also cites security, infrastructure and connectivity as other considerations which come into play; “In today’s ever-evolving global landscape, the factors that make a location attractive extend far beyond mere cost considerations. While cost undoubtedly still plays a significant role, companies and employees are increasingly prioritising other factors when evaluating the appeal of a destination.”