Is Australia Really The Most Expensive Place on Earth?

There are many studies out there being carried yearly to review prices in different countries around the world, and after having the most expensive coffee, houses, broadband etc... I have read last week that a leased property in Sydney prime retail precinct is now more expensive than London or Paris or New York!

 

Surely that has to be the ultimate proof that we are out of our heads?

 

I beg to disagree: all the studies are conducted from overseas and use a standard currency such as the US dollar for all the countries being looked at. When the Australian dollar goes up 25% against the other major currencies in 12 months, it means that for someone earning Australian dollars, everything here has gone up by 25%.

 

However for anybody making an income within Australia well... nothing has changed. That is for the retailer who is renting a shop in Sydney and who's more than likely to be selling his goods in Australian dollars, his rent is still what it was. And if his suppliers happen to be overseas, he could actually be even better off, as he's now paying less for his stock.

 

Same applies to all the other items on the list above, whether we're talking about coffee or property, they're the priciest in the world because our currency has increased significantly – but it only really matters if you are spending your money in Melbourne and earning it in New York.

 

More to the point, it's been calculated that once the average increase in income has been taken into consideration we are not paying more for most of our bills and daily items than we were 6 years ago! (Although that is an average, and won't apply to everyone).

 

Give it another 5 - 10 years and let the other developed economies pick up their messes and before you know it our currency will go back to normal level and then guess what? We're going to be cheeaaap again according to these studies! And then again for us living, earning and spending here that will make no difference.