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I'd like to see where Perth sits on that scale. There's a pub here that charges $18 (~$19US) for a pint of Hoegaarden and an average pint of beer is $10.

by tjmc 15y ago

brc 15y ago
Check the 2011 rankings. Perth comes in just after the usual Norway and Switzerland usual suspects. I don't know how it can be fixed, but Australia's insane cost of living explosion needs to be sorted out. I suspect most of it is real-estate related (ie, the pub needs to pay huge rent so passes it on in beer costs). It used to be that someone in the UK or USA could sell their house and move to Australia and live the good life. Now that same strategy would see you living a crappy life in a bad suburb. Several of my friends have recently made the decision to move to the USA where they can. The economy isn't great, but the cost of living can't be beat if you do have a job.
- tjmc 15y ago
  It's partially real estate, but I think it's also a combination of a tight labour market distorted by big mining wages and a "captive audience". Perth (and Darwin) are so isolated that the hospitality industry seem to get away with murder. The good news for HNers - there is abundant work here. If you know people outside the tech scene, they could do a lot worse than get a working holiday visa and visit Australia whilst the US or UK economies improve.
  - bane 15y ago
    In the States we'll just drive further out and try to urban sprawl our way out of high housing prices...usually with miserable traffic problems as a result. Any idea why Australia, with more than ample land, and relatively small population doesn't attempt the same? (not saying it's a good idea, but interesting to notice at any rate)
    - brc 15y ago
      Usually urban planning restrictions and poor roads stops too much outward flow. Having said that, I do believe Perth is spreading fast enough. However new suburbs that are constructed are rarely considered 'affordable' suburbs. They are usually shiny new estates with big houses.
    - jacques_chester 15y ago
      > Any idea why Australia, with more than ample land, and relatively small population doesn't attempt the same? Our land and planning laws are amongst the most complicated and restrictive on Earth. A comparable economy is Texas - but Texas has very light land release rules and so housing prices there have remained, in real terms, much more reasonable. Additionally, almost all of our major cities are wedged between the ocean and hills or mountain ranges.
    - eddy_chan 15y ago
      Outside of the large cities infrastructure is almost non-existent. The national highway network is horrible compared to the US, the rail network is even pokier. Hospitals and schools are of a much lower standard as well government just doesn't have the money to build this stuff. Secondly, large businesses who provide employment don't want to be based outside of large cities because there's no talent so you get this problem the net migration is to the large cities forcing up real-estate prices and labour costs. It's this vicious catch-22 - how can you attract people and businesses to regional centres without investing in infrastructure yet where's the demand to build infrastructure if populations of said regional centres is declining not increasing. It's 2012 and the drive to urbanization (especially mega cities) has never been greater than now and yet to solve some of Australia's structural economic problems we need to attract people away from big cities by creating self-sustaining (in the sense it provides adequate opportunities for its own population) regional towns with fast rail links to major cities. It's an impossible feat with the system of Government we have now which fosters basically a 2 party system where both are slightly right of centre and stuck in their echo chamber of mediocrity.
- eddy_chan 15y ago
  hehe sounds like my life, moved back from San Francisco to Sydney last year and whereas I used to live a 15 minute bicycle ride from work in SOMA I now live 35 minutes train ride from Sydney CBD to hold my housing costs at the same level. "Eating Out" has all but disappeared from my life because to get equivalent quality restaurant food, it's about double to triple the cost of SF. I drink a lot less beer too now don't know whether it's good or bad. I suspect you're right, all the 'nice stuff' and discretionary leisure activities are in the expensive areas so we're all paying indirectly for the insane price of real-estate. Even though I have a mortgage I'm really hoping prices stagnate in absolute $ terms so our real standard of living can catch up again.
cletus 15y ago
I'm from Perth but now live in NYC and I've lived in London, Zurich and Germany. I can tell you that the erosion in the real standard of living in Australia, particularly Perth, in the last decade is mind-blowing. The way I see it the resources boom has driven up the cost of construction both directly (through infrastructure projects) and indirectly (increased demand for residential housing from net migration). It now costs anywhere from $1500-2000/m2 to build a house. That's insane. That cost is then passed on through wage demands, the cost of running any business and so on. Rent is at or above New York levels (my old apartment in West Perth is now more expensive than my apartment in Manhattan). Apart from roughly comparable rent in NYC, everything else is significantly cheaper. Increased population pressure, property prices and construction costs are also reflected in the skyrocketing price increases in food, water and power. London is (or at least was the last time I visited) reasonably expensive. Zurich has a reputation for being expensive but honestly it's not anymore. Fact is, you can still get a studio in the city for maybe under CHF1000/month (something you can't in Perth). Yes food is more expensive but you pay lower taxes and everything else is, at worst, comparable in cost. I look at property prices in nice towns like Zug or Luzern and (IMHO) it's way more affordable than Perth. So ignore whatever the CPI tells you about Australia. IMHO it's not a place you want to live now unless you have owned property for at least 10 years (and thus rode the property boom and are reasonably cashed up) or are rich. Either way it's one of the most expensive countries on the planet now.
- tjmc 15y ago
  I think the real estate prices here are more a side effect of the mining boom rather than the drivers of the cost of living here. We recently got a quote of $5000 for paving ~30m^2 out the back of our house. It's a joke. Trades people are in such high demand here that they can charge more than surgeons. I worry about the effect that this is going to have on the education level of the local populace. What's the incentive to stay in school to Yr 12 when you can drop out at 15, get an apprenticeship and be earning a motza by the time you're 18?
- brc 15y ago
  Agreed on all points. Question is : what can be done? I would say a property price drop would be a good thing because it would feed into lower rents for everything. But that, of course, would have damaging wealth effects for people who lose everything when their mortgage went underwater, and the banks would take massive losses on their oversized residential mortgage portfolios. More economic growth might reignite property and job markets. I was talking to a friend of mine in Sydney who earns 200k plus. He was struggling with the idea of buying an average townhouse in an average Sydney suburb because his mortgage + expenses would run over $3k per month. It's madness. Are we to just stagnate our way out of it? Hold property prices and rents level for 10 years while incomes eke upwards? Or is Australia destined to be in the Norway/Switzerland/Sweden club forever more, and the cheap-as-chips country of my youth is gone forever? I just can't get away from the uncomfortable feeling that whatever adjustment comes along will be painful.
jacques_chester 15y ago
That's in the CBD. Not representative of Perth at large.

I'd like to see where Perth sits on that scale. There's a pub here that charges $18 (~$19US) for a pint of Hoegaarden and an average pint of beer is $10.

by tjmc 15y ago

I'd like to see where Perth sits on that scale. There's a pub here that charges $18 (~$19US) for a pint of Hoegaarden and an average pint of beer is $10.

brc 15y ago

Check the 2011 rankings. Perth comes in just after the usual Norway and Switzerland usual suspects. I don't know how it can be fixed, but Australia's insane cost of living explosion needs to be sorted out. I suspect most of it is real-estate related (ie, the pub needs to pay huge rent so passes it on in beer costs). It used to be that someone in the UK or USA could sell their house and move to Australia and live the good life. Now that same strategy would see you living a crappy life in a bad suburb. Several of my friends have recently made the decision to move to the USA where they can. The economy isn't great, but the cost of living can't be beat if you do have a job.

tjmc 15y ago
It's partially real estate, but I think it's also a combination of a tight labour market distorted by big mining wages and a "captive audience". Perth (and Darwin) are so isolated that the hospitality industry seem to get away with murder. The good news for HNers - there is abundant work here. If you know people outside the tech scene, they could do a lot worse than get a working holiday visa and visit Australia whilst the US or UK economies improve.
- bane 15y ago
  In the States we'll just drive further out and try to urban sprawl our way out of high housing prices...usually with miserable traffic problems as a result. Any idea why Australia, with more than ample land, and relatively small population doesn't attempt the same? (not saying it's a good idea, but interesting to notice at any rate)
  - brc 15y ago
    Usually urban planning restrictions and poor roads stops too much outward flow. Having said that, I do believe Perth is spreading fast enough. However new suburbs that are constructed are rarely considered 'affordable' suburbs. They are usually shiny new estates with big houses.
  - jacques_chester 15y ago
    > Any idea why Australia, with more than ample land, and relatively small population doesn't attempt the same? Our land and planning laws are amongst the most complicated and restrictive on Earth. A comparable economy is Texas - but Texas has very light land release rules and so housing prices there have remained, in real terms, much more reasonable. Additionally, almost all of our major cities are wedged between the ocean and hills or mountain ranges.
  - eddy_chan 15y ago
    Outside of the large cities infrastructure is almost non-existent. The national highway network is horrible compared to the US, the rail network is even pokier. Hospitals and schools are of a much lower standard as well government just doesn't have the money to build this stuff. Secondly, large businesses who provide employment don't want to be based outside of large cities because there's no talent so you get this problem the net migration is to the large cities forcing up real-estate prices and labour costs. It's this vicious catch-22 - how can you attract people and businesses to regional centres without investing in infrastructure yet where's the demand to build infrastructure if populations of said regional centres is declining not increasing. It's 2012 and the drive to urbanization (especially mega cities) has never been greater than now and yet to solve some of Australia's structural economic problems we need to attract people away from big cities by creating self-sustaining (in the sense it provides adequate opportunities for its own population) regional towns with fast rail links to major cities. It's an impossible feat with the system of Government we have now which fosters basically a 2 party system where both are slightly right of centre and stuck in their echo chamber of mediocrity.
eddy_chan 15y ago
hehe sounds like my life, moved back from San Francisco to Sydney last year and whereas I used to live a 15 minute bicycle ride from work in SOMA I now live 35 minutes train ride from Sydney CBD to hold my housing costs at the same level. "Eating Out" has all but disappeared from my life because to get equivalent quality restaurant food, it's about double to triple the cost of SF. I drink a lot less beer too now don't know whether it's good or bad. I suspect you're right, all the 'nice stuff' and discretionary leisure activities are in the expensive areas so we're all paying indirectly for the insane price of real-estate. Even though I have a mortgage I'm really hoping prices stagnate in absolute $ terms so our real standard of living can catch up again.

cletus 15y ago

I'm from Perth but now live in NYC and I've lived in London, Zurich and Germany. I can tell you that the erosion in the real standard of living in Australia, particularly Perth, in the last decade is mind-blowing. The way I see it the resources boom has driven up the cost of construction both directly (through infrastructure projects) and indirectly (increased demand for residential housing from net migration). It now costs anywhere from $1500-2000/m2 to build a house. That's insane. That cost is then passed on through wage demands, the cost of running any business and so on. Rent is at or above New York levels (my old apartment in West Perth is now more expensive than my apartment in Manhattan). Apart from roughly comparable rent in NYC, everything else is significantly cheaper. Increased population pressure, property prices and construction costs are also reflected in the skyrocketing price increases in food, water and power. London is (or at least was the last time I visited) reasonably expensive. Zurich has a reputation for being expensive but honestly it's not anymore. Fact is, you can still get a studio in the city for maybe under CHF1000/month (something you can't in Perth). Yes food is more expensive but you pay lower taxes and everything else is, at worst, comparable in cost. I look at property prices in nice towns like Zug or Luzern and (IMHO) it's way more affordable than Perth. So ignore whatever the CPI tells you about Australia. IMHO it's not a place you want to live now unless you have owned property for at least 10 years (and thus rode the property boom and are reasonably cashed up) or are rich. Either way it's one of the most expensive countries on the planet now.

tjmc 15y ago
I think the real estate prices here are more a side effect of the mining boom rather than the drivers of the cost of living here. We recently got a quote of $5000 for paving ~30m^2 out the back of our house. It's a joke. Trades people are in such high demand here that they can charge more than surgeons. I worry about the effect that this is going to have on the education level of the local populace. What's the incentive to stay in school to Yr 12 when you can drop out at 15, get an apprenticeship and be earning a motza by the time you're 18?
brc 15y ago
Agreed on all points. Question is : what can be done? I would say a property price drop would be a good thing because it would feed into lower rents for everything. But that, of course, would have damaging wealth effects for people who lose everything when their mortgage went underwater, and the banks would take massive losses on their oversized residential mortgage portfolios. More economic growth might reignite property and job markets. I was talking to a friend of mine in Sydney who earns 200k plus. He was struggling with the idea of buying an average townhouse in an average Sydney suburb because his mortgage + expenses would run over $3k per month. It's madness. Are we to just stagnate our way out of it? Hold property prices and rents level for 10 years while incomes eke upwards? Or is Australia destined to be in the Norway/Switzerland/Sweden club forever more, and the cheap-as-chips country of my youth is gone forever? I just can't get away from the uncomfortable feeling that whatever adjustment comes along will be painful.

jacques_chester 15y ago

That's in the CBD. Not representative of Perth at large.