Sydney vs. Melbourne: Cost of Living Breakdown

Want to know if it’ll be more expensive to live in Melbourne or Sydney? Here’s HOOD’s comprehensive cost of living breakdown on utilities and household living expenses for both cities.

Breakdown

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Sydney and Melbourne might be two of Australia’s best cities to live in, both are arts and music hubs, have diverse offerings in food and culture, and host bustling CBDs. Sydney is the slightly-more populous city, of the two, though NSW takes up almost four times the amount of landmass Victoria holds. Sydney also boasts the world-famous Opera House and Harbour Bridge, making it Australia’s number-one destination for international and domestic tourists alike. Melbourne is known for its coffee culture and hipster aesthetic, large international acts often conclude their tours in this town due to its reputation as Australia’s cultural capital.

Is Melbourne or Sydney is more expensive?

Sydney and Melbourne are right up there in terms of Australian living expenses. If you’re thinking of moving to either city (or its surrounding suburbs), your largest monthly expense is guaranteed to be rent/mortgage. The real estate market in Melbourne and Sydney took a bit of a sting in 2020, due to the economic impacts of COVID19 precautions and restrictions. The market has started to ease back into normalcy since, but house prices are still inflated, and the market is still showing quirks of the lockdown measures – such as inner-city apartment rent being cheaper than single units 40 km from the CBD.

Utilities in Sydney are actually slightly cheaper, and the savings become more significant depending on the size of your household. A four-person household, for example, spends an average of $219 on electricity and gas in a month in Sydney; whereas in Melbourne, they would have spent around $272. Water is also about $100 cheaper in Sydney per month (for a four-person household) than it is for one in Melbourne.

Where the utilities discrepancy may save you some money on your monthly budget if you move to Sydney, your travel expenses may make up the difference. Sydney’s public transport infrastructure, while improving, is still catching up to the standards of other world-class cities. There are train and tram systems connecting the city to its outer suburbs, but the city’s roads themselves are a winding labyrinth of tunnels and alleyways, making rush hour commuting a real pain. Melbourne’s layout is based on a grid, and is lined with tram and bus routes. Commuting at peak hour in the Melbourne CBD will, however, still require elbowing through crowded train stations or sitting in standstill traffic.

All in all, both cities are pretty on par, across the averages of basic living expenses. It’s most likely to be your lifestyle that dictates your monthly budget, more than the conditions of either city. Read further on to see our breakdown of each item comprising your monthly living expenses budget.

Housing

Sydney’s average monthly rent is somewhat higher than Melbourne’s. Across the cities and their surrounding areas, average monthly rent is around $2340 ($540 per week) in Sydney, and $1733 per month ($400 per week) in Melbourne.

For the average $400 per week property, you should be able to find a two or three bedroom house about one hour’s drive from the Melbourne CBD, or a one-bedroom studio apartment around the city centre. In Sydney, with an average rent of $540 per week, you could find a relatively cosy apartment in the CBD or in the inner suburbs, most likely a one-bedroom or studio setup. Alternatively $540 per week could also get you a two-to-three bedroom house, perhaps with a decent backyard, around half an hour’s drive from Sydney’s city centre.

Utilities

There are three main things to consider here: which provider you choose, how many people there are sharing your household, and the kinds of facilities you use at your property – do you have an electric hot water system? A heated outdoor pool? Ducted heating?

Your utility bill total will increase incrementally with the number of people your household contains. But more people living under the same roof means that utilities will actually be cheaper per person when split. This is something to keep in mind if you’re deciding between living on your own or in shared accommodation.

You should also consider, when crafting your budget, 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.

As mentioned previously, general utilities expenses can be cheaper overall in Sydney when compared to Melbourne, but this difference is only really significant on a monthly basis for households of four or more.

Electricity and gas

The average Sydneysider household spends about $118 per month on electricity. The average single-person household spends $82 per month, two-person households spend $109 per month and four-person households $147 per month.

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.

For gas, costs will vary much less than electricity depending on household size. NSW actually gets the benefit of slightly cheaper gas rates, in comparison to Victoria, with the average household spending around $72 per month. 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.

Water

The overall average Sydney households spend on the water is around $82 per month, which is actually the lowest in the country. In Sydney, a single person household is likely to spend about $74 per month on water, two-person households spend around $89 per month and four-person households around $108 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.

Home Internet

This one is the easiest to figure out because most of Australia has now switched over to the federal government’s National Broadband Network (NBN). Sydney and Melbourne are both almost 100% covered by the NBN, with the exceptions still having access to relatively stable 4G and 5G connections.

While internet service providers offer different prices to access scaling NBN speed tiers, most households end up spending a relatively similar amount.

Most one-to-four-person households will be looking at connecting to an NBN50/20 speed pack (average evening download speeds of 50 Mbps and upload speeds of 20 Mbps) with an unlimited data cap. For such a service, you could pay within the range of $70 – $95.

You will of course 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 the norm, though some smaller 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 comparable to the NBN.

Groceries

The variance between grocery bills from state to state in Australia is actually quite small. The far more influential factor on the total tally 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 for household cleaning supplies and personal hygiene products.

Travel

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 COVID-19 on our travelling habits in 2020 and the price of crude oil. If you live or are planning to move to a rural part of New South Wales, then you’ll probably see a slight decrease from the average in your monthly fuel spend.

If you’re living in or moving closer to the city, you’ll have access to public transport options like trains, trams and busses. Opting for public transport instead of driving can significantly decrease your commuting costs if it’s a practical option. 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.

All up

Here’s an itemised breakdown of utilities and groceries expenses in Sydney vs Melbourne, based on household size. Remember that you’ll have to factor in additional expenses like travel and housing to your total budget:

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