Are you considering moving to London or Melbourne, but want to know more about how the costs stack up?
When I first moved to Australia, the prices really caught me off guard. I couldn’t believe how expensive alcohol was compared to London, but I was also shocked at how cheap Melbourne’s public transport was. And, of course, I certainly had no complaints about Melbourne’s affordable and abundant coffee, which really is world-class.
From the cost of a roof over your head to your morning coffee, this guide uses my firsthand experience in Melbourne and insights into London to help you work out which city might suit your budget better.
Let’s get started!
Rental Costs
Rental costs are a hot topic in both London and Melbourne, but, when it comes to value for money, Melbourne clearly wins.
London
London is split up into “zones” for public transport, but these also apply to housing. Generally speaking, Zones 1-2 are the most expensive, since they’re the most central, with each zone getting less and less expensive – but involving more of a commute!
For a one-bedroom apartment in Zone 2, you can expect to pay around £1,500 per month ($2,853)! Of course, there are neighbourhoods in Zone 2 that will be more expensive, like Hampstead or Notting Hill, and others that will be cheaper, like Bow and Whitechapel.
The London property market is very fast-paced and competitive compared to Melbourne.
Melbourne
Like London, the more centrally you live in Melbourne the more you’ll pay in rent. The inner suburbs such as the CBD, Southbank, and Docklands are the priciest, with each outward suburb generally becoming more affordable but increasing your commute time.
For a one-bedroom apartment in the “cool” inner suburbs like South Yarra or Carlton, you can expect to shell out around $1,800 per month (£950).
However, there are variations within these areas too – suburbs like Fitzroy and Brunswick will cost you more due to their cool vibes and proximity to the city, while spots a bit further out like Coburg and Footscray can be more budget-friendly.
Verdict: When it comes to rent prices, Melbourne is more affordable than London.
Bills
London and Melbourne are both known for being cold in the winter, so it goes without saying that the cost of bills is a huge factor when it comes to the cost of living in both cities.
London
London has undergone an “energy crisis” in recent years, meaning that energy prices have risen dramatically and people have been struggling to afford to heat their homes in the winter.
When this first kicked in, in the winter of 2022, energy bills almost doubled. That leads to a lot of people in London being super selective about when they turn their heating on.
With that said, you can expect to spend between £150-£250/month ($285-$475/month) on your utility bills in London, depending on how energy-efficient your house is, how often you turn the heating on, and how many people are living with you to split the bills.
Melbourne
The good news is, the cost of utilities is ever-so-slightly cheaper in Melbourne than in London. In a two-bedroom apartment in Melbourne, you can expect to spend around $210/month (£110.55/month) on utilities, but, of course, this price will be higher in winter and lower in summer.
A big thing to keep in mind when house hunting in Melbourne is the energy efficiency of your home. For whatever reason, I’ve found the level of heat insulation in Melbourne homes, compared to London, to be pretty poor, meaning you’ll spend more on your heating bill in winter.
This could have a big impact on your Melbourne cost of utilities each month.
Verdict: the cost of bills per month in Melbourne is slightly lower than in London, but only just!
Grocery Costs
Australia is well known for its extortionate grocery prices, thanks to its isolation from the rest of the world, but London is known as one of the most expensive cities in the world. So, which city is more affordable when it comes to your grocery shop?
Let’s find out!
London
In London, different grocery shops offer vastly different prices. My eyes were nearly watering when I checked out the cost of things in supermarkets like Waitrose and M&S! For this reason, grocery shops like Aldi, Lidl, Tesco or Asda are your best bet for budget shopping.
A loaf of bread will set you back around £1.40 ($2.66), and you can expect to pay around £4.25 ($8.07) for 500 grams of boneless chicken breast, £1.50 ($2.85) for a pack of 6 free-range eggs, and £0.65 ($1.23) per litre of milk.
Even though grocery costs have gone up a lot in London over the last year, it’s one of the few things about life in London that I didn’t find disproportionately expensive. The prices you pay for groceries in London are the same as everywhere else in England.
Melbourne
In Melbourne, Coles and Woolworths are the most popular options when it comes to grocery shopping. A loaf of bread will cost you around $4 (£2.11), 500 grams of boneless chicken breast costs around $7.50 (£3.95), a pack of 6 free-range eggs will set you back around $4.20 (£2.21), and you’ll pay around $1.60 ($0.84) for a litre of milk.
Although I’d heard that grocery prices in Australia were far higher than in the UK, I didn’t notice a huge difference with the basics.
It was only when it came to things like out-of-season fruits and veggies, alcohol (which is way more expensive than in London grocery shops!) and imported things like certain types of cheese that I noticed a massive difference.
Verdict: Given the high cost of imported items in Melbourne, London wins when it comes to the affordability of groceries!
Transportation Costs
The good news is, both London and Melbourne are easy to live in without a car, thanks to their extensive public transport systems.
London
In London, you’ll get the cheapest transport prices by using contactless payments rather than buying physical tickets. If you’re taking public transport every day, you’ll also save more money by purchasing a weekly, monthly, or annual travel pass.
Even though London public transport is affordable (£1.75/$3.32 per bus journey and £2.80/$5.32 per tube journey), it soon adds up if you’re using it a lot.
For example, a travel pass between Zones 1-3 will set you back a mighty £192.80 ($4366.12) for the monthly pass, or £2008 ($3813.07) for the yearly pass!
Melbourne
To use public transportation in Melbourne, you’ll need a Myki pass. You’ll pay $5.30 (£2.79) for a two-hour fare, which is similar to what I used to pay in London.
Unlike London prices, you can save a massive amount on longer travel passes. A 30-day Myki pass will set you back $190.80 (£100.49) – comparatively almost half the price of the London monthly travel pass! A yearly Myki pass will cost you $2067 (£1088.75) – way cheaper than London.
Verdict: when it comes to the cost of public transportation in London vs Melbourne, Melbourne easily wins.
Eating Out & Drinking
When it comes to eating out and drinking, neither London nor Melbourne are exactly “budget-friendly”. However, there are a few key differences in costs when it comes to the bar and restaurant costs in London vs Melbourne.
London
The price for a pint of beer varies depending on where you’re drinking, but you can expect to pay around £6.50 ($12.37) anywhere in central London. This is absolutely scandalous by UK standards, but fairly affordable by Aussie standards!
Coffee in London is expensive, with a regular latte costing around £3.75 ($7.13).
Dining out in London is definitely more expensive than in Melbourne – I couldn’t believe it when I paid £52 ($100) for a meal for two with a glass of wine each at a fairly standard restaurant in London. And that’s supposed to be cheap!
For a meal for two with wine at a “nice” restaurant, you can expect to pay at least £80+ ($152+)!
Melbourne
The price of a pint of beer has been a hot topic in recent years, with many pubs now charging over $15 for a pint – generally thanks to the high taxes imposed on alcohol.
Melbournians love their coffee, and you can get a latte for around $4.50 (£2.40). That’s why people in Melbourne drink more coffee than in London – it’s not ruinously expensive!
Dining at a casual restaurant in Melbourne will set you back around £40 ($76) for a meal for two with drinks. For something “fancier”, expect to pay $120+ (£63) for a meal for two with wine.
Verdict: While London is more expensive for coffee and dining out, Melbourne is more expensive when it comes to alcohol.
Work Salaries
The difference between salaries in London and Melbourne varies massively depending on what industry you’re in.
A solicitor friend of mine in London was on a salary of £95k per year. When they looked into moving to Melbourne, they’d be on only $100k (£52k)! It’s safe to say, they decided to stay in London…
London
Salaries in London are far higher than in the rest of the UK, mostly to offset the higher cost of living there. In financial circles, the salaries are exceptionally high to attract top talent from all over the world. If you’re working in law, finance, or insurance, you’ll likely earn over £100k with a couple of years’ experience.
On the other hand, jobs like nursing and teaching are extremely poorly paid in London when compared to the cost of living. Teachers earn around £35k ($66k) in London, with nurses averaging around £37k ($70k) per year.
Salary is pretty much the be-all-and-end-all in London. If you’re on a low salary, you’re going to find it very hard to enjoy your life there. It’s expensive! For this reason, out of all of the factors we’re covering in this blog post, this is the most important to consider.
Melbourne
Although London may attract higher salaries for finance, insurance and law, there are a few industries where Melbourne’s salaries exceed those in London: technology, healthcare, and construction.
Medicine is significantly better paid than in London. In Melbourne, a GP can expect to get around $360k (£189k) per year, whereas in London, they can expect £86k ($163k). That’s a massive difference.
When it comes to construction, a Construction Manager in Melbourne can expect to earn around $280k (£147k), compared to £75k ($142k) in London.
If you’re in one of the traditionally high-paying industries in London, like finance, insurance, or law, a good rule of thumb I’ve heard is to convert your London salary by simply changing the £ sign to a $. For example, if you’re earning £110k in London, you’d probably expect to get around $110k (equivalent to just £57k) in Melbourne. Yikes!
Verdict: When it comes to salaries, it totally depends on your industry. If you work in professional services, London offers better salaries. For most other industries, Melbourne has better salaries.
Conclusion: Cost of Living in London vs Melbourne
After delving into the costs of renting, bills, groceries, transportation, dining out, drinking, and salaries, it’s clear that Melbourne generally offers a more affordable lifestyle compared to London.
While London might boast higher salaries in some industries, these often don’t offset its steep living costs, which include eye-wateringly high rental prices.
Final verdict: When we take everything into consideration, living in Melbourne is around 12% cheaper than living in London. When you take into account the potential for a higher salary in Melbourne, depending on your industry, living in Melbourne could save you a pretty penny!
This post may contain affiliate links. This means if you click through and make a purchase I may receive a small payment at no extra cost to the reader.
