Aussie cities join ranks of world’s most expensive

Sydney and Melbourne have both made the list of the top 10 most expensive cities in the world.

The Economist Intelligence Unit's (EIU) 2012 Cost of Living index has named the most expensive cities in the world to live based on a the costs of a range of goods and services in addition to housing. Sydney and Melbourne both cracked the top 10, with Sydney ranking as seventh most expensive and Melbourne ranking eighth. By comparison, New York ranked 47th.

Zurich topped the list, overtaking Tokyo as the world's costliest city. European cities made up five of the top 10, with the EIU commenting that "mature markets" such as those in Western Europe tended to be the most expensive. However, it cited the high Australian dollar for pushing Sydney and Melbourne into the top 10.

"Local inflation in mature markets always has far less influence on the relative cost of living than the currency movements of the countries in question. This also explains the recent presence of Australian cities like Sydney and Melbourne in the 10 most expensive locations as last year saw the Australian dollar pass parity with the US dollar from holding half that value a decade ago," the EIU said.

The news comes as recent research into the views of NSW residents reveals that 57% of surveyed households are under mortgage or rental stress – with almost one third spending 40% or more of their income on repayments.

The McKell Institute’s State of New South Wales Survey garnered the opinions of more than 1,000 NSW residents, and found that the cost of living has led one in four respondents to consider moving interstate.

Other findings included 67% of surveyed households being under more financial pressure than they were one year ago and 73% stating that their household income is more stretched than it was three years ago.

Queensland proved to be the most popular option amongst those respondents who were considering moving interstate, with 40% nominating the Sunshine State as their preferred choice for its climate, relaxed lifestyle, job opportunities and perceived lower cost of living.

“Rebuilding our state requires a sustained commitment to building infrastructure, improving services and addressing the lack of housing supply, particularly in Sydney,” said McKell Institute executive director Peter Bentley.