If you're looking to move soon be sure to connect with HOOD.
1 Person Household
2 Person Household
4 Person Household
Electricity & gas
+ housing + travel costs
Melbourne regularly tops the Global Liveability Rankings as the world’s most livable city, and for good reason. Known as the cultural, music and (most importantly) coffee capital of Australia, Melbourne is certainly an exciting place to live.
If you’re thinking of moving to Melbourne (or if you just want to know how you stack up against other Melbournian households) then this is the blog for you. In this blog, HOOD breaks down the average cost of living by individual expenses by household size, including average expenditure on housing, utilities and household expenses.
How expensive is it to live in Melbourne?
Traditionally, if you’re looking to live in or near the CBD, you can expect a steep increase in your housing expense. Melbourne is one of Australia’s most expensive cities for renting and home buying, second only to Sydney. It’s no secret that the housing market in Victoria has been volatile in 2023, renters have been reporting steep payment increases and buyers are struggling with continuous interest rate rises.
Nevertheless people have to move when they have to move. With that in mind, do plenty of research on the housing available in the area you’re looking at. Housing is typically the highest monthly expense for most households, and also the most difficult expense to decrease, so it’s worth taking the time to exhaust your options while house hunting.
In January of 2023 PropTrack’s Market Insight report found that weekly rent for dwellings across Melbourne rose 2.3 per cent to $450 per week. (totalling a 9.8 per cent increase since the start of 2022). A more recent survey from PropTrack found that the median house rent in Melbourne increased once again to $480 per week.
According to PropTrack director of economic research Cameron Kusher, ““We expect rental prices will continue to grow in the capital cities over the coming months, while the prospects for further rental price growth regionally appear to be easing,” per mozo.com.au.
Keep in mind that these median figures take into account a spectrum of dwellings, from large-capacity, single-family households to single-bedroom apartments. So your experience of prices may differ according to your needs.
To make an informed decision about which utilities to choose for your household, there are three key factors to take into consideration. Firstly, you'll need to choose which providers to go with. Secondly, the number of people living in your household will have an impact on your utility bills. While bills will increase incrementally with each additional person, utilities will actually cost less per person if more people are living under the same roof. This is important to keep in mind when deciding whether to live alone or in shared accommodation.
Lastly, the facilities your house includes will also affect your utility costs. For example, having an electric hot water system, heated outdoor pool, or ducted heating will result in higher bills. It's also important to note that certain utilities, like water and gas, are billed quarterly rather than monthly.
For the purposes of this post, we've broken down the expenses into monthly figures to make it easier for you to compare costs.
Due to certain pieces of legislation, the makeup of the power industry and myriad other economic factors in the state, Victoria is actually one of the cheapest places in Australia in terms of household power expenses.
According to HOOD’s analysis of flatrate electricity offers from a sample panel of Victorian providers (including providers not offered by HOOD), the average yearly electricity cost for households was:
Single-person household: $855 per year Two-person household: $1173 per year Four-person household: $1425 per year
Which would break down monthly to:
Single-person household: $71 per month Two-person household: $98 per month Four-person household: $119 per month
*Keep in mind that monthly/quarterly electricity bills will fluctuate throughout the year
Gas usage typically varies less across household sizes when compared to electricity. At the start of 2023 Victorian households reported their average quarterly gas bill to be $186, which breaks down to a monthly expense of $62. However HOOD’s analysis of current Victorian gas offers found an average expected cost of $102 per month. Maintaining a conservative approach, we’ll use the more expensive figure to budget against.
Also remember that if you’re a Victorian resident, you have access to the state government’s $250 Power Saving Bonus rebate. All you have to do is submit a digital copy of an existing power bill, and you’ll get the compensatory funds transferred to your elected account.
According to a survey performed in January 2023, Victorians across all household sizes reported an average quarterly water bill of $191, which works out to a monthly expense of $64. In Melbourne, a single person household can expect to spend about $60 per month on water, two-person households about $69 per month, and four-person households around $99 per month.
Connecting to the internet in Australia is generally done through the National Broadband Network (NBN), which is run by the federal government. While there are different pricing tiers offered by internet service providers for access to different speeds, most households end up paying similar amounts.
Assuming you want to connect to an NBN50/20 speedpack, which offers average evening download speeds of 50 Mbps and upload speeds of 20 Mbps with an unlimited data cap, you can expect to pay between $70 and $95 per month. It is possible to pay more for faster speeds, but an NBN50/20 connection should provide sufficient bandwidth for a four-person household with multiple devices connected to the internet.
Unlimited data caps are pretty much commonplace now for NBN home internet, although some providers still offer plans with data limits of 200GB or 500GB at a lower price.
Unfortunately the quality of your home connection will be somewhat tied to the equipment your home is fitted with - fiber to the premises (FTTP), fiber to the curb (FTTC) or fiber to the node (FTTN). If you ultimately choose not to use the NBN and instead opt for a wireless or satellite connection, which may be necessary if you live in a rural area, you should expect to pay slightly more. For example, 4G or 5G home internet plans from Optus or Telstra can cost between $70 and $100 per month for an average high-speed connection.
While there may be some regional differences in grocery prices in Australia, the biggest factor affecting your grocery bill will be the size of your household and your lifestyle. According to a survey from May 2023, the average single-person household in Australia spends about $104 per week on groceries, while two-person households spend around $144 per week and four-person households around $203 per week. This works out monthly to:
Single-person household: $451 per month Two-person household: $624 per month Four-person household: $880 per month
If you have options other than driving, reducing travel expenses can be a relatively easy way to save money. According to Budget Direct, transport costs can consume up to 13.8% of an average Australian household's annual income. If you live in Melbourne, owning a car can be particularly expensive due to additional costs such as insurance, registration, roadside assistance, and maintenance.
The average price of petrol in Melbourne was $1.69 per litre between January and April 2023. However, if you live in a rural area of Victoria, you may be able to spend less on fuel.
If you're moving to or already live in a more urban area with public transportation options such as trains, trams, and buses, choosing to use public transport can significantly reduce your commuting expenses. The average Australian public transport commuter spends about $105 per month on travel passes. In Melbourne, you do have the option to purchase Myki passes for seven days or even a year, with prices varying depending on the zones you'll be using. For example, a Zone 1 + 2 year-long Myki pass costs $861.25, which breaks down to just $72 per month.
The Full Breakdown
The following is a detailed breakdown of utility and grocery expenses in Melbourne, categorised by household size. It is important to keep in mind that in order to determine your overall budget, you will also need to account for your other expenses such as housing, travel, recreation, entertainment, education, fitness etc.