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RISING COST OF LIVING AND HOW IT AFFECTS MELBOURNE VS REGIONAL CITIES

COST OF LIVING

As you work out the cost of living and housing in Melbourne, Ballarat and Bendigo, there are plenty of factors that should be taken into account if you are thinking about affordability and lifestyle. It looks at the differences in the costs of housing, both renting and buying, as well as the cost of amenities and bills in these three Victorian cities.

Housing Prices: Renting and Buying

Melbourne

Melbourne is Australia’s second largest city and has a very diverse property market with differing prices between the suburbs.

• Buying: In Melbourne, the median house price is about $850,000. But this figure can vary massively by suburb. For example, median house prices are around $16.93 million in affluent Toorak.

• Renting: Rental costs in Melbourne also change depending on the property and the particular location. The average weekly rent on a standard three bedroom house in the suburbs is between $450 and $550. Rents for apartments in central locations and sought after areas such as Southbank and Fitzroy, can be upwards of $600 – 800 a week.

Ballarat

About 100 kilometres west of Melbourne, Ballarat is a more affordable market.

• Buying: Homebuyers are finding that Ballarat’s median house price of around $607,500 makes it a more viable option than Melbourne.

• Renting: Rental prices in Melbourne are higher than in Ballarat. As of the second quarter in 2024, the median house rental price increased by 5.0 per cent over the past 12 months to $420 per week.

Bendigo

Bendigo is located about 150 kilometres northwest of Melbourne and provides a housing market unto itself.

• Buying: Bendigo’s median house price is about $605,000, up 0.4 percent on the quarter. This makes Bendigo a more affordable alternative to Melbourne and one which sits on similar price points to Ballarat.

• Renting: Bendigo’s median house rent is $430 and the median rental yield is 3.7%. Clearly this is a higher yield than Melbourne Metro’s 3.0%, making it a potentially better return on investment for property investors.

Cost of Living: Amenities and Bills

Cost of housing is only one part of cost of living, and then there’s amenities and bills. Melbourne, Ballarat and Bendigo sit in the same state of Victoria – though regional cities such as Ballarat and Bendigo often have slightly lower costs in some areas. Now let’s talk about these differences in a little more detail.

Utilities

Electricity and Gas

• Melbourne: Due to urban demand, network cost and higher consumption rates in highly concentrated areas, electricity and gas prices in Melbourne is relatively high. Average monthly electricity bill will be $120–$150 and gas bills will run $90–$120, depending on usage.

• Ballarat and Bendigo: In many of the regional areas like Ballarat and Bendigo utility costs tend to be slightly lower. Electricity bills are on average $100–$130 per month and gas bills are around $80–$110. For these savings, the lower population density and the potential of having smaller homes in regional areas factors in.

Key Considerations:

• Because they live in colder areas, households in regional areas often tend to use gas for heating more so than electricity and that could mean higher winter bills.

• All three cities are seeing an increase in the adoption of renewable energy, with incentives across Victoria to help make the switch and reduce long term utility costs.

Water

• Uniform Pricing: The cost per kiloliter is the same across all of Victoria because water rates are regulated. But water bills can vary from person to person depending on what they use and their lifestyle.

• Melbourne: Large gardens or pools may mean that urban residents pay more for water. Melbourne’s average monthly water bills are $70–$100.

• Ballarat and Bendigo: Regional residents with smaller properties and often with more water efficient homes may have monthly water bills in the $60–$90 per month range.

Groceries and Dining

Groceries

• Melbourne: Melbourne is a major metropolitan hub, and as such has a huge variety of grocery stores from high end supermarkets to budget chains, including ALDI. Competition can ensure that prices are not too high, but urban grocery is more expensive still because you have greater demand and the costs associated with supplying a product in an urban environment. For example:

• Milk: $1.35 per liter

• Bread: $2.50 per loaf

• Eggs: $6.00 per dozen

• Chicken breast: $12.00 per kilogram

• Ballarat and Bendigo: Basic grocery prices in Ballarat and Bendigo are similar but often slightly cheaper on the street and at farmer’s markets or independent grocers. These areas have found local produce more accessible and affordable.

• Milk: $1.25–$1.30 per liter

• Bread: $2.00–$2.30 per loaf

• Eggs: $5.00–$5.50 per dozen

• Chicken breast: $10.50–$11.50 per kilogram

Dining Out

• Melbourne: Melbourne’s dining out can be more expensive because of property, wage and restaurant operating cost. The average cost for a meal at a cheap restaurant is $25–$30 per person; for a three course meal for two at a mid-range restaurant expect to pay $80–$120.

• Ballarat and Bendigo: The regional dining is less expensive. A meal in a casual restaurant in Ballarat and Bendigo will cost between $20 and $23, while a three course meal for two at a mid-range restaurant will run to $60 – $90. Both cities also contain a slew of local cafes, known for being cheap (coffee for around $3.50 to $4.50, as opposed to $4.50 to $5.50 in Melbourne).

Transportation

Public Transport

• Melbourne: Trams, trains and buses provide the city’s extensive public transport network, but at a higher cost and extensive coverage. For unlimited travel in Zone 1 (city and inner suburbs) a daily Myki fare is $10.00. The monthly passes cost between $155 and $160.

• Ballarat and Bendigo: Public transport in these cities consists mainly of bus services with very low fares. One bus ride costs about $3.50 and monthly passes are usually $90 – $100. But these services’ limited reach often requires the use of personal vehicles for convenience.

Personal Vehicle Costs

• Fuel: For example, petrol in Melbourne costs between $1.90 and $2.10 per litre, a bit more than $1.85–$2.00 per litre in Ballarat and Bendigo.

• Parking: Parking in Melbourne can be extremely expensive with CBD daily parking rates of $20–$50. Parking is available and is more often free or low cost than in most areas in Ballarat and Bendigo.

Commute Times

Melbourne residents more often have a longer commute time because of traffic congestion and longer distance between suburbs and CBD. Ballarat and Bendigo are associated with shorter average commutes, a better work life balance and cheaper transport costs.

Additional Living Costs

Childcare

• Melbourne: In Melbourne, childcare costs more – around $120–$150 a day in urban centres.

• Ballarat and Bendigo: The cost of $90 to $120 per day is a bit more affordable than regional childcare services.

Health and Fitness

• Melbourne: Melbourne gym memberships are in the $70–$90 per month range.

• Ballarat and Bendigo: Memberships for regional gyms and fitness centers run $50–$70 per month.

Entertainment and Activities

Melbourne provides a greater breadth of entertainment such as theaters, concerts, sports for exorbitant money. Alternatives in regional areas like Ballarat and Bendigo offer better cost-effectiveness including local festivals, community events and nature based activities.

Income and Affordability

There are differences in income level between Melbourne, Ballarat and Bendigo, as well as overall affordability.

• Melbourne: An average monthly net salary is about $6,395.96.

• Ballarat: The monthly average net salary is about $4,722.22.

• Bendigo: The average monthly net salary is $4,500.

While Ballarat and Bendigo have lower incomes, the relaxing of the housing and amenity cost also helps make these regional cities affordable for many.

Conclusion

There are a number of things to consider when deciding between Melbourne, Ballarat and Bendigo: housing costs, amenities, income levels and lifestyles. While Melbourne can be expensive, it’s a bustling urban environment, and Ballarat and Bendigo are much cheaper, regional lifestyles. To make informed decisions about living, investing or relocating in Victoria it is important to understand these differences.

Thinking About Moving? We’re Here to Help!

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