Cost of living
Mercer's Worldwide Cost of Living Survey 2013 ranked Sydney equal 9th in terms of "expensiveness" for expatriates, from a list of 214 cities. The 2013 result represents an increase for Sydney from the previous year's Cost of Living Survey and is due in part to the ongoing strength of the Australian dollar against the US dollar, which remains high by historical standards. The value of the Australian dollar is a reflection of the strength of the Australian economy, and the opportunities offered by its proximity and access to rapidly developing Asian markets. Despite the strong Australian dollar, Sydney remains a more affordable and competitive location compared with other major cities in the Asia Pacific region such as Tokyo (ranked third), Singapore (fifth) and Hong Kong (sixth).
Since the Mercer survey was conducted in March, the Australian dollar has begun to depreciate against the US dollar as global commodity prices decline and the US dollar strengthens, meaning a drop in Sydney's ranking is expected in the next survey.
The UBS Prices and Earnings 2012 report ranks Sydney as having the second highest domestic purchasing power out of 72 cities worldwide. Domestic purchasing power compares absolute prices and income levels in order to establish how many goods and services can be purchased with the average local wage, and is calculated as net hourly wages divided by the cost of a basket of commodities excluding rents. Sydney's ranking, second only to Zurich, indicates the level of prosperity the city's workers enjoy, driven by relatively higher wages and a comparatively low tax burden.
Data as at March 2013
1. The Cost-of-Living Index covers 214 cities across five continents and is weighted and composed of more than 200 items which represent typical expatriate spending patterns. Items measured in the survey include housing, transport, food, clothing, household goods and entertainment.
2. Rankings based on a basket of goods in major cities including housing (New York City = 100). The main factors determining a city's ranking are the relative strength of the respective currency against the US dollar in the 12 months between rankings, and price movements over the 12 month period compared to those in New York City.
Source: Mercer, July 2013, www.mercer.com