Why is Everything So Expensive Here?

By Ronnie Frey

Sydney is a beautiful city and has been a wonderful place to live for the past couple months. A big downside to living here though, is that everything costs so much. Food, entertainment, and clothing are all significantly more expensive here than they are at home. So, my question is why? What is the reason for such high prices? A big reason for this is the depreciation of the U.S. dollar in relation to the Australian dollar, but things have gotten more expensive for Aussies as well. I was talking to an Australian man the other day and we ended up having a conversation about how much it costs to live in Sydney. He told me that it is actually cheaper for him to take his family on a vacation to the States, then it is for him to take them on a vacation here in Australia, and that is including the cost of flying over to the U.S. He also mentioned that prices here used to very similar to prices in the States, and that only recently it has become so much more expensive.

According to Businessweek.com, Australia has 6 cities listed in the top 30 most expensive cities in the world, and in 2009, not a single Australian city was listed in the top 100. In comparison, New York, America’s most expensive city, is listed at number 44. A big reason for the increase in cost of living is because the Australian dollar has increased 30% in relation to the U.S. dollar, since June 2010. Another reason is rising costs for businesses. The strength of the Australian dollar along with rising electricity and wage costs has led to Australia becoming the second most expensive place to do business among major economies, after Japan. Rising business costs lead to rising costs for consumers. Understanding a little more about why it cost so to live in Sydney won’t make it any easier (or cheaper), but it does provide some insight into the Australian economy and how it compares with the U.S. economy.


Wong, Venessa. “Which City in the World Has $24 Movie Tickets?.” Businessweek.Com (June 10, 2011): 3. Business Source Premier, EBSCOhost (accessed April 30, 2012).

Colebatch, Tim. “Australia pays for cost of business.” National Times (March 24, 2012): http://www.theage.com.au/opinion/political-news/australia-pays-for-cost-of-business-20120323-1vpn2.html (accessed May 1, 2012).

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