Is it more expensive to live in Melbourne or Sydney? Here’s HOOD's comprehensive cost of living breakdown on household living expenses.
Melbourne cost of living: monthly household expenses breakdown
Moving in or to Melbourne? Here’s HOOD's essential breakdown to help you budget for monthly utilities, housing and household expenses.
Moving in or to Melbourne? Here’s HOOD’s essential breakdown to help you budget for monthly utilities, housing and household expenses. If you're looking to move soon be sure to connect with HOOD.
This is our 2022 Cost of Living blog:
|Category||1 Person Household||2 Person Household||4 Person Household|
|Electricity & gas||$211||$238||$272|
Melbourne is a beautiful city, renowned as Australia’s cultural, music and coffee capital. Melbourne also regularly tops the Global Livability Rankings as the world’s most livable city, making it an attractive but also potentially expensive place to live.
This article breaks down the average cost of living in Melbourne by household size, listing what the average Melbournian spends on housing, utilities and household expenses. Our goal with this guide is to give you a tangible baseline to plan your monthly Melbourne living budget.
Is Melbourne expensive to live in?
Traditionally Melbourne can be quite pricey, especially if you’re looking to live near the CBD. It comes in as Australia’s second-most expensive city to live in, behind Sydney.
In terms of housing, 2020 saw a volatile shift in Melbourne’s real estate market, which most experts attribute to the social and economic impacts of COVID19. House sale prices have skyrocketed in previously modest suburban areas, while overall average rental prices have actually decreased – making Melbourne the second-most affordable city to rent a house in Australia in 2021.
No one has a confident prediction for when Melbourne’s housing market will return to normal, or if it will return to pre-2020 conditions at all. When shopping around in the rental market, be sure to do plenty of research on the area you’re planning to move to, and keep track of trends in pricing.
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Melbournian rent averages at around $400 per week, on par with Brisbane, and less than Sydney and Canberra. There is, of course, a lot of variability to consider here – like the size of house that you’re looking for, the area you’d prefer to live in, your proximity to public transport and shopping facilities etc…
For $400 per week ($1,733 per month), you should be able to find a two or three bedroom house about one hour’s drive from the Melbourne CBD. In addition, the Australian Financial Review reports that in 2021 rental prices of Melbourne CBD apartments have fallen 34.4% over the previous year to an average of $393 per week ($1,703 per month).
You’ll need to consider three main factors when deciding on utilities: which providers you choose, the number of people in your household, and the kinds of facilities your house includes – do you have an electric hot water system? A heated outdoor pool? Ducted heating?
Each of your utility bills will increase incrementally depending on the number of people living in your household. But more people living under the same roof means that utilities will actually be cheaper per person. This is important to consider if you’re deciding between living on your own, or in shared accommodation.
You should also bear in mind that certain utilities like water and gas are billed quarterly, as opposed to monthly. For the purposes of this post, things have been broken down into monthly expenses.
For electricity bills, Victoria is actually one of the cheapest states to live in. The overall average electricity bill for Victorians in 2020 was $84 per month. The average single-person household in Melbourne spends around $75 a month on electricity, two-person households spend an average of $102 per month, and four-person households around $136 per month.
Gas usage tends to vary less than electricity in terms of household size. Victoria’s average gas bill is a little higher than the national average at around $136 per month, with negligible differences between larger and smaller households.
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Water bills across the board in Australia average out at $91 per month. In Melbourne, a single person household is likely to spend about $84 per month on water, two-person households spend around $126 per month and four-person households around $210 per month.
This one is the easiest to figure out, as most of Australia’s network has now switched over to the federal government’s National Broadband Network (NBN). While internet service providers offer different prices to access scaling speed tiers through the NBN, most households end up spending a relatively similar amount.
Assuming you’ll be looking into connecting to an NBN50/20 speedpack (average evening download speeds of 50 Mbps and upload speeds of 20 Mbps) with an unlimited data cap, you could pay within the range of $70 – $95.
You will have the option to pay more for faster speeds; however an NBN50/20 should be more than enough bandwidth to support multiple devices connecting to the internet simultaneously in a four-person household. Unlimited data caps are also becoming more standard, though some providers still offer 200GB or 500GB NBN plans at a lower price tag.
If you don’t plan to use the NBN to connect your household internet, opting for a wireless or satellite connection instead – which you may need if you’re moving to a rural area – you should expect to pay slightly more. 4G or 5G home internet from Optus or Telstra, for example, can cost you in the range of $70 to $100 per month, for an average high-speed connection.
Grocery bills actually don’t vary much from state to state in Australia – the far more influential factor will be your household size and lifestyle. The average single-person household in Australia spends around $408 per month on groceries, two-person households spend $584 per month and four-person households spend around $724. This should account not only for weekly food shopping, but also household cleaning supplies and personal hygiene products.
Reducing travel expenses can be the easiest part of minimising your budget, if your choices aren’t limited to only driving. According to Budget Direct, the average cost of transport for an Australian household can take up 13.8% of their total annual earnings. Owning a car in Melbourne can drive up expenses if you’re not careful – your budget should include a buffer to account for things like insurance, road tolls, registration, roadside assistance, servicing and maintenance etc.
In terms of fuel prices, the average Australian driver paid around $305 per month in 2020, a stark increase from the $144 per month drivers spent in 2017. This price hike, again, can be attributed to the impacts of COVID19 on our travelling habits in 2020 and the price of petrol supply. If you live or are planning to move to a rural part of Victoria, then you’ll probably see a slight decrease from the average in your monthly fuel spend.
If you’re living in or moving to a more built up area with viable public transport options like trains, trams and busses, opting for public transport can significantly decrease your commuting costs. The average Australian public transport commuter spends around $105 per month on travel passes. In Melbourne, it is possible to buy seven-day or even year-long Myki passes, the prices for which vary depending on the public transport zones you’ll be accessing. A Zone 1 + 2 year-long Myki pass, for example, will set you back $861.25, breaking down to just $72 per month.
Here’s an itemised breakdown of utilities and groceries expenses in Melbourne, based on household size. Remember that you’ll have to factor in additional expenses like travel and housing to your total budget:
|1Person Household||2 Person Household||4 Person Household|
|Electricity & gas||$211||$238||$272|
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