Aussie cities skyrocket on list of world’s most expensive places to live

The rise of the Australian dollar, and increasing house prices mean Australia now has four of the world's 15 most expensive cities to live in, according to a global living cost survey released by the Economist Intelligence Unit.

Sydney has jumped from 32nd place just two years ago to sixth spot on the list, with Melbourne up from 38th to seventh, with overall living costs some 40% higher than New York.

Perth and Brisbane, which are almost 25% more expensive than New York, are ranked 13th and 14th.

Tokyo, Oslo and Osaka take the top three places overall while Mumbai, Tunis and Karachi are the three cheapest. All four Australian cities are now costlier than London, Rome, Berlin, Hong Kong and Beijing.

The Australian cities' rankings have rocketed sharply over the past decade as Sydney ranked 71st most expensive in 2001 with Melbourne 80th, Perth 91st and Brisbane at 93rd.

Survey author Jon Copestake says the strength of Australia's dollar was partly to blame for soaring living costs.

During the decade the Australian dollar has climbed by about 120% against the US dollar, having bottomed out at US48.4c in 2001.

The Economist's survey compares the cost of living by sampling prices of more than 400 items including food, health, housing, education and transport from 133 cities across the world.

“A fair part of it relates to house prices,” chief Nomura economist Stephen Roberts says, noting the fixed 30-year mortgage rate in the US is about 4.7% compared with 7.8% in Australia.

Melbourne ranked among the most expensive for a daily business trip at $A712 a day – made up of one night's hotel accommodation, two meals, two taxi trips, a daily newspaper and a drink at a bar. Sydney came in at about $588.