Relocating to Melbourne? A Breakdown of the Cost of Living and Expenses

Melbourne Victoria is regularly ranked as one of the most livable cities in the world, known for its high quality of life, vibrant culture, world-class education, and dynamic food scene. With a population of over 5 million, it’s a multicultural hub offering an eclectic mix of art, entertainment, sports, and education. However, before packing your bags and moving to this exciting city, it’s essential to understand the costs associated with living there.

Whether you’re renting an apartment in the bustling city center or looking to settle in a suburban neighbourhood, Melbourne has a wide range of expenses that you’ll need to account for. This guide provides a detailed breakdown of the living expenses you’ll encounter when relocating to Melbourne.

A Quick Snapshot of Melbourne & Its Poulation

2021 AUSTRALIAN BUREAU OF STATISTICS CENSUS STATS

Demographic	Value
People	4,917,750
Male	49.20%
Female	50.80%
Median age	37
Families	1,299,184
Average number of children per family	NULL
For families with children	1.8
For all households (a)	0.8
All private dwellings	2,057,482
Average number of people per household	2.6
Median weekly household income	$1,901
Median monthly mortgage repayments	$2,000
Median weekly rent (b)	$390
Average number of motor vehicles per dwelling	1.8

Housing Costs In Melbourne & What You Can Expect When You Move

Renting in Melbourne

The cost of living in Melbourne has been steadily rising due to increased housing demand. The city offers a variety of housing options, from luxury apartments in the city centre to more affordable homes in suburban areas.

• Central Melbourne: Living in the heart of the city has its perks. You’ll be close to public transport, shopping, and entertainment, but this comes with a price. The average cost of renting a one-bedroom apartment in Melbourne’s central business district (CBD) is between AUD 1,900 and AUD 2,700 per month. Popular neighbourhoods in the city center include Southbank, Carlton, and Docklands. These areas are favoured by young professionals and expats who want to be near the hustle and bustle of the city. When planning your move, it’s essential to consider the cost of living in Melbourne, especially for rent and utilities.
• Suburbs: Suburban areas offer significant savings if you’re looking for a more affordable living arrangement. For example, in suburbs like Footscray, Coburg, and Reservoir, you can find one-bedroom apartments for AUD 1,400 to AUD 1,800 per month. These suburbs are still well-connected by public transport and have easy access to the city center, making them attractive options for families and those looking for more space at a lower cost.

Extra Costs for Renters:

• Bond Deposit: Most rental properties require a bond deposit, usually equivalent to four weeks’ rent. This amount is refundable at the end of your tenancy, provided the property has no damage.
• Utilities: Besides rent, you’ll need to budget for utilities like electricity, gas, and water. These costs typically range between AUD 150 and AUD 250 per month, depending on your home’s size and usage.
• Internet: Monthly internet plans vary depending on speed and provider. On average, a decent broadband package costs AUD 60 to AUD 100.

Buying Property in Melbourne

If you’re considering purchasing a home, the property market in Melbourne is competitive. Property prices vary significantly depending on the location, with central areas being much more expensive than the suburbs.

• Median House Prices: In Melbourne’s central areas, the median house price ranges from AUD 1.2 million to AUD 1.5 million. In comparison, suburban areas like Werribee, Cranbourne, and Thomastown offer more affordable options, typically ranging from AUD 800,000 to AUD 1.2 million.

Additional Costs For Home Buyers:

• Stamp Duty: In Victoria, stamp duty is payable on property purchases. This tax is calculated based on the home’s purchase price and can range from 4% to 5% of the property’s value.
• Legal Fees: When buying a home, you must also account for legal costs, including conveyancing and title transfers. These fees usually amount to around AUD 1,500 to AUD 3,000. (Consider the land tax after buying the house. Victoria has one of the highest land tax)
• Home Loan Options: If you’re financing your home purchase, it’s essential to understand your mortgage options. Interest rates on home loans in Australia typically range from 3% to 5%. Explore multiple sources to obtain the most competitive rates and terms available.

What To Expect With Transport Expenses

Public Transport

Melbourne has an extensive public transportation network that includes trams, trains, and buses, making it easy to get around the city without owning a car.

• Myki Card System: Melbourne uses an innovative card system called Myki for all public transport services. You can load money onto your Myki card or purchase a weekly/monthly pass for unlimited travel within designated zones. A weekly pass for unlimited travel within Zones 1 and 2 costs approximately AUD 45, while a monthly pass is around AUD 170.
• Trams: Melbourne’s tram network is the largest in the world and is a convenient option for getting around the inner city. The city centre is serviced by a Free Tram Zone, where passengers can ride for free, making it an attractive option for commuters and tourists.
• Trains: The train network connects Melbourne’s suburbs to the city centre, making commuting easy for work or leisure. Trains run frequently, especially during peak hours.
• Buses: While less widely used than trams or trains, Melbourne’s buses provide an essential link between suburbs that are not serviced by other public transport options.

Owning A Car In Melbourne

While Melbourne’s public transport system is reliable, many people still prefer the convenience of owning a car, especially if they live in outer suburbs or frequently travel to regional areas.

• Car Purchase & Selling: The cost of buying a new car in Melbourne ranges from AUD 20,000 to AUD 40,000 for standard models, with second-hand cars available for less. Luxury vehicles or SUVs can cost significantly more. ( Note cars with interstate number plates can be sold) Cash for cars Melbourne is one of the top unwanted car buyers.
• Insurance and Registration: Vehicle registration fees in Victoria are approximately AUD 800 per year, while comprehensive car insurance premiums can range between AUD 800 and AUD 1,500 annually, depending on your vehicle and driving history.
• Fuel Costs: Fuel prices fluctuate, but petrol costs around AUD 2 per liter on average. A typical driver may spend between AUD 150 and AUD 250 monthly on fuel, depending on how often they drive.
• Parking Fees: Parking costs vary across the city. In the CBD, parking can cost up to AUD 30 per day, while suburban areas often offer accessible or more affordable parking options.

Ridesharing & Taxis

For those who prefer not to own a car, ridesharing services like Uber and taxis are widely available throughout Melbourne.

• Costs: A short Uber ride (3–5 kilometers) costs between AUD 15 and AUD 25, while longer trips (10–15 kilometers) may cost between AUD 40 and AUD 60. Taxi fares are generally similar, but Uber is often the more popular and affordable.

Groceries & Daily Essentials

Average Grocery Costs

Groceries in Melbourne can vary depending on your lifestyle and shopping habits. If you enjoy cooking at home, you can keep your grocery bills relatively low, especially if you shop smart.

• Weekly Grocery Budget: For a single person, weekly grocery bills typically range from AUD 80 to AUD 150. Families with children may spend between AUD 150 and AUD 300 weekly on groceries.
• Supermarkets vs. Markets: Melbourne has several major supermarket chains, including Woolworths, Coles, and Aldi. These supermarkets offer various products, from fresh produce to household items, and typically have competitive prices. However, shopping at local markets like Queen Victoria Market or Prahran Market often offers fresher produce at lower prices, especially if you’re willing to shop at the end of the day when vendors reduce prices to clear stock.

Household Goods & Personal Care

In addition to groceries, you’ll need to budget for household items such as cleaning products, toiletries, and personal care products.

• Costs: Cleaning products, toiletries, and other household goods typically add AUD 30 to AUD 60 to your monthly budget. If you’re mindful of discounts and promotions, you can save money by buying in bulk or taking advantage of store loyalty programs.
• Discounts & Loyalty Programs: Many supermarkets and retail stores offer loyalty programs that provide discounts or reward points. Signing up for these programs can help reduce your overall shopping expenses.

Healthcare Costs

Medicare System Overview

Australia’s public healthcare system, Medicare, covers many medical costs for residents and citizens. Suppose you’re a permanent resident or hold certain visas. In that case, you’re eligible for Medicare, which provides access to free or subsidized medical care, including GP visits, specialist appointments, and public hospital treatment.

• Medicare for Residents: Most general practitioner (GP) visits are bulk-billed, meaning patients have no out-of-pocket expenses. However, not all GPs offer bulk billing, and you may need to pay AUD 50 to AUD 90 for a consultation if bulk billing isn’t available.

Healthcare Costs for Expats

If you’re an expat moving to Melbourne, you must check whether you qualify for Medicare. Expats from countries with reciprocal healthcare agreements with Australia (such as the UK or New Zealand) may be eligible for limited Medicare services. However, if you’re not eligible, you must arrange private health insurance to cover medical costs.

Private Health Insurance

While Medicare covers basic healthcare, many Australians and expats opt for private health insurance to access a broader range of services, such as private hospital care, dental, optical, and physiotherapy.

• Costs: Private health insurance premiums vary depending on the level of coverage. You can expect to pay between AUD 150 and AUD 300 per month for basic coverage. More comprehensive plans, which include hospital and extras cover, can cost significantly more.

Out-of-Pocket Expenses

Even with Medicare or private insurance, there are often out-of-pocket costs for medical services.

• GP Visits: If your GP doesn’t bulk-bill, a standard consultation can cost between AUD 50 and AUD 90. Medicare rebates typically cover a portion of this cost.
• Dental Care: Dental care is not covered by Medicare, so you must pay for treatments without private health insurance. A routine dental checkup and cleaning costs between AUD 150 and AUD 200.
• Specialists: Appointments with medical specialists, such as dermatologists or cardiologists, can cost between AUD 150 and AUD 300, depending on the service.

Education Expenses

Public vs. Private Schools

Melbourne is home to a range of high-quality public and private schools. Despite the high cost of living in Melbourne, it remains a popular choice for professionals and students. The cost of education varies significantly depending on whether you opt for the public or private system.

• Public Schools: Public schools in Melbourne are free for residents and citizens, though there may be some costs for textbooks, uniforms, and extracurricular activities. Expats on certain visas may be required to pay fees ranging from AUD 5,000 to AUD 15,000 per year, depending on the visa type and school.
• Private Schools: Private education is much more expensive, with annual tuition fees ranging from AUD 15,000 to AUD 35,000. In addition to tuition, you’ll need to budget for uniforms, textbooks, and extracurricular fees.

University Education

Melbourne is home to some of Australia’s top universities, including the University of Melbourne, Monash University, and RMIT. If you’re considering studying or sending your children to university, it’s essential to understand the costs involved.

• Local Students: Australian residents benefit from government-subsidized education through the Higher Education Loan Program (HELP). Local students typically pay between AUD 10,000 and AUD 20,000 annually in tuition fees, depending on the course and university.
• International Students: International students pay significantly higher tuition fees, with costs ranging from AUD 25,000 to AUD 45,000 per year, depending on the program of study.
• Textbooks and Living Expenses: In addition to tuition, students must budget for textbooks, which can cost between AUD 500 and AUD 1,000 per semester. Living expenses, including accommodation and groceries, can add another AUD 15,000 to AUD 25,000 per year to the overall cost.

Entertainment & Leisure

Dining Out

Melbourne is known for its diverse food scene, with countless restaurants, cafes, and street food options to suit every budget. From luxurious dining venues to more casual food establishments, the selection available ensures that there is a suitable option for every individual.

• Costs: A meal at a casual café or restaurant typically costs between AUD 20 and AUD 40 per person, while fine dining experiences can easily exceed AUD 100 per person. Many affordable dining options are available, especially in ethnic neighbourhoods like Richmond (Vietnamese), Carlton (Italian), and Footscray (African).

Cultural & Recreational Activities

Melbourne is a city rich in culture, with plenty of opportunities for entertainment and leisure activities.

• Cinemas and Theatres: A trip to the movies costs around AUD 20 to AUD 25 for a standard ticket. Melbourne also has a vibrant theatre and concert scene, with ticket prices for live performances ranging from AUD 50 to AUD 200, depending on the show.
• Gyms and Sports Clubs: If you’re into fitness, gym memberships in Melbourne cost between AUD 50 and AUD 100 per month. Many gyms offer pay-as-you-go options or discounted memberships for students and seniors. Melbourne is also home to various sporting clubs, from soccer and cricket to tennis and golf, with membership fees varying by sport and location.

Nightlife

Melbourne’s diverse nightlife offers everything from chic rooftop bars to bustling clubs and live music venues.

• Costs: A night out in Melbourne, including drinks and entry fees, can cost between AUD 50 and AUD 100. Popular areas for nightlife include Chapel Street, the CBD, and Fitzroy, which offer a range of venues for different tastes.

Miscellaneous Expenses

Clothing & Fashion

Melbourne is known as the fashion capital of Australia, with a range of shopping options from high-end boutiques to thrift stores.

• Costs: Clothing prices vary widely depending on where you shop. In retail stores, jeans can cost between AUD 80 and AUD 150, while a new shirt may range from AUD 30 to AUD 80. Thrift stores and outlet malls offer more affordable options, often significantly lower prices than retail.

Childcare

If you’re moving to Melbourne with children, you’ll need to budget for childcare, which can be a significant expense.

• Daycare: The cost of daycare in Melbourne ranges from AUD 100 to AUD 150 per day, depending on the facility and location. Some centres offer government subsidies to eligible families, which can help reduce costs.

Pets

Pet ownership in Melbourne comes with costs, including food, grooming, and veterinary care.

• Monthly Costs: For a cat or small dog, expect to spend between AUD 80 and AUD 200 monthly on pet food, grooming, and regular vet visits. Emergency vet visits or long-term medical care can add significantly to this cost.

Taxes & Financial Obligations

Income Tax Rates

Australia has a progressive tax system, with rates based on your income level. The tax-free threshold is AUD 18,200, meaning you don’t pay any income tax on earnings below this amount. Tax rates range from 19% to 45% for income above this threshold, depending on your earnings.

Council Rates

If you own a property in Melbourne, you must pay council rates. These fees go toward maintaining local services, such as waste collection and road maintenance. The cost of council rates varies depending on the value of your property and location but generally ranges between AUD 1,500 and AUD 2,500 per year.

Other Financial Obligations

• Superannuation: Employers in Australia must contribute to their employees’ superannuation (retirement savings) accounts. The current mandatory contribution rate is 11% of an employee’s earnings.
• Goods and Services Tax (GST): A 10% GST is applied to most goods and services in Australia. This tax is included in the displayed price of most items, so you won’t need to calculate it separately when making purchases.

Relocating to Melbourne can be an exciting adventure, but it’s essential to understand the costs involved clearly. From housing and transportation to groceries and entertainment, Melbourne offers a wide range of expenses that must be considered. While the cost of living may seem high, the Melbourne’s vibrant culture, world-class amenities, and high quality of life make it a rewarding place to call home.

FAQs

1. What makes Melbourne one of the most livable cities in the world?
   Melbourne is known for its high quality of life, cultural diversity, great education, public transportation, and vibrant arts, food, and entertainment scenes.
2. What are the typical utility costs?
   Monthly utility bills (electricity, heating, cooling, water, and garbage) for a standard apartment can range from AUD 150 to AUD 300, depending on usage and the season.
3. How does Melbourne’s weather affect daily life?
   Melbourne’s weather is famously unpredictable, with four seasons in one day. It’s a good idea to always have layers or an umbrella handy!
4. Are there any additional costs for healthcare?
   Australia has a public healthcare system (Medicare), but many residents also opt for private health insurance, which can cost between AUD 100 and AUD 300 per month, depending on coverage.
5. What are the average costs for eating out?
   Dining out can vary significantly. A meal at a mid-range restaurant might cost around AUD 25 to AUD 50 per person, while fast food options are usually around AUD 15.
6. How much do I need to budget for entertainment?
   Entertainment costs can vary widely, but budgeting around AUD 100 to AUD 200 per month for activities like movies, outings, and events is a reasonable estimate.
7. How does the tram system work in Melbourne?
   Melbourne’s iconic trams are a convenient way to get around the city. The Free Tram Zone in the CBD allows you to ride for free within the central area.
8. What is the general cost of living compared to other Australian cities?
   Melbourne is generally considered one of the more expensive cities in Australia, but it often offers a slightly lower cost of living compared to Sydney. Overall, costs can vary based on lifestyle choices and suburb selection.

Planning your budget carefully and taking advantage of cost-saving opportunities—such as living in the suburbs, using public transport, and shopping at local markets—allows you to enjoy everything Melbourne offers without breaking the bank. Whether you’re drawn to the city for its job opportunities, education, or lifestyle, Melbourne promises a unique experience worth the investment.