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How much does living cost in Australia if you’re planning to settle?

How much does living cost in Australia if you’re planning to settle?

Brought to you by Savvy

Living in Australia can be expensive — there’s no point in denying the obvious. Utilities prices, house prices, transport prices, and food prices are all at record highs. That’s not to say it’s not affordable to live in Australia; some places are quite affordable and have all the luxuries of top-tier cities such as Melbourne or Sydney. If you are planning to study in Australia when restrictions end as an international student, you might be wondering: how much does living in Australia cost? How much more or less does it cost if you’re planning to stay?

Most affordable vs least affordable cities

When it comes to living expenses without rent, most Australian capital cities will cost between $1,400 to $2,200 to live in each month — this means food, transport (public), utilities, and so on. When it comes to renting, 2020 has shifted the affordability around somewhat.

The most affordable capital city according to CoreLogic is Adelaide, with a combined rent average (units and houses) of $410 per week. This is followed by Perth in Western Australia with an average of $428 per week. The third most affordable — and usually the second-least affordable — is Melbourne; the second most populous city behind Sydney. Its combined rents are $438 per week.

This is followed by Brisbane ($448), Hobart ($460), Darwin ($491) and surprisingly, Sydney with $556. Sydney is usually the most expensive but has been knocked out of top spot by Canberra with an average rent of $586 per week. Keep in mind however that by sharing accommodation, individual rent may be much reduced, and therefore more affordable.


2020 has made rental markets fluctuate The rental markets have fluctuated in Australia due to inter-state border closures, an extended COVID-19 lockdown in Victoria which saw 8,000 people leave the state, and almost no international arrivals since March 2020. Many rental properties remained vacant, usually filled by international students. A lot of Australians moved to the regions as alternative work from home arrangements became a possibility.

Capital city rents rose 0.7% over the year from 2019–2020 and regional rents rose 2.9%. Units, which are usually favoured by international students, saw rents decline by 3%.

Renting or buying?

Renting as an international student is usually cheaper than buying a home though they may come with the same costs. If a student is renting, they will need to buy their own furniture — or if they’re lucky, share furniture with housemates. On-campus housing and residential colleges are also an option, but they are limited in nature compared to other countries such as the United States.

Buying in Australia as a non-resident is more expensive but not impossible. As a student, you will need to come up with 30% of the deposit for a home, as banks and lenders will believe you are a higher risk than residents or citizens. You will also need a clean credit history and good financial standing.

Student visa holders will also require Foreign Investment Review Board authorisation before you are allowed to purchase any property in Australia. The FIRB review may be waived if you are intending to create new housing by demolishing an existing property; agree to sell the property if you leave or intend to stay as a permanent resident or register as a company to provide accommodation for your employees.

FIRB applications average around $5,000AUD for a property under $1 million, $10,000 for a property valued between $1–2 million, and increase by $10,000 for every $1 million of the property’s value.

Getting a home loan in Australia is also quite favourable at the moment due to historic low interest rates – 0.1% is the official cash rate set by the Reserve Bank.

How to save on home loans – offset accounts

One way to speed up your mortgage and pay it off sooner is to take out an offset account. According to finance expert and Savvy Managing Director Bill Tsouvalas, an offset account is an easy way to reduce interest.

“An offset account links your savings account to your home loan. When you deposit money into the account, the money is put toward paying off the interest portion of your home loan.

Let’s say you have a $500,000 mortgage and $40,000 in savings. Having it offset means you’re only paying interest on the $460,000. Also, this interest calculation is made daily.”

The offset account helps homeowners pay down the interest and instead concentrate on the principal.

Tsouvalas says an offset account, at least at the moment, is better than having savings. “With a paltry 0.1%p.a. on deposits, you aren’t getting much value by having your savings sit in an account. Using it as an offset can save you more in the long-term than trying to squeeze almost nothing out of savings.”

Remember: you should always consult a financial professional before making a decision to take out finance of any kind.

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