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Melbourne is the city that everyone wants to live in. At the rate of people moving there it won't be long before the population overtakes Sydney. It is still a bit cheaper compared to its northern counterpart. To get the most of the Melbourne lifestyle without breaking the bank, here is the advice you need to follow.  

The costs of living in Melbourne are pretty high. But (there is always a ‘but’) if you choose reign in your wild spending habits, there will be money left over at the end of the week. For newcomers to the greatest city in the Southern Hemisphere or if this your first-time-out-of-home, this article is going to help you make better choices. Do the right stuff and you can create an amazing life in “the most liveable city in the world.” 

Where should I live?

Melbourne is a giant, sprawling suburbia. Closer to the city you’ll discover why it has such a strong reputation for fabulous food experiences, culture, live music and sporting events. To get the most out of the Melbourne lifestyle nab a share house in the inner suburbs. If you want to save more money, head further out. With rental properties, generally the further distance from the CBD the lower the weekly rent and the larger the property. The following suburbs are rich in share houses, and don’t compromise on the city’s vibe.  

North: Collingwood, Carlton, Brunswick, Northcote
East: Richmond, Hawthorn, Camberwell, Prahran, South Yarra
Bayside: Port Melbourne, St Kilda, Elwood, Elsternwick 
West: Flemington, Newmarket, Footscray, Parkville
Students: For students, definitely take advantage of the cheaper student housing in Hawthorn and Carlton (close to Swinburne, RMIT and Melbourne Universities). 
Note: you must be able to prove attendance at a local university to get the discounted rental rates.  

What's the housing like?

A lot of inner Melbourne was established prior to the invention of the car, therefore period houses in the picturesque streets of St Kilda, Brunswick and Richmond mostly offer on street parking. While these houses sell for a packet, when maintenance work hasn't been done since 1971, the rent is comparably cheap.

Apartment blocks are plentiful everywhere. Brick apartments from the built onwards from the 60s are cheaper than the shiny, new complexes going up all over the place. The new places have that factory-fresh sheen. At the lower end of the market they tend to be samey and still quite expensive for what you get - a box with a window. 

Housemates

If you can afford $350 for a studio apartment in the wild streets of Saint Kilda, live by yourself by all means. For anyone new to Melbourne or moving out of home for the first time, finding housemates will do two things to help you: they’ll halve living costs, and you’ll have a ready-made group of friends. Rent in a very modest sharehouse, split 3 ways, budget $200 per week each, or $867 per month. Add up the other expenses. Internet and TV: $70 monthly bundles become $23.33.
Gas and Electricity: these depend on your house and the time of year. For arguments sake $30 gas per month, $100 electricity per month, and if you’re lucky the landlord will pay for the water in an apartment block.

Public Transport vs Cars

Suburbs in zone 1 (there are only zone 1 and zone 2) are close to the city and have lots of transport options. Basically, you want to be near a tramline because:

  • Trams and trains are cheaper than cars
  • Housing without car spaces is cheaper
  • Car parking is a competitive sport in Melbourne and make no mistake, the car parking officers are out in force and you will waste money on tickets
  • It’s quicker to get public transport a lot of the time anyway because of traffic jams 
  • Multi level car parks in the CBD cost upwards of $30 per hour in business hours. Sure they are cheaper at night and over weekend but that’s when you’re likely to be drinking. 
  • It is rare to find a convenient car park that you don’t have to pay for.  

Public tranpsort fares
31 day myki pass full fare zones 1 & 2: $145.08
31 day myki pass concession fare zones 1 & 2: $72.54
To learn more about public transport fares, visit ptv.vic.gov.au

Running car costs
Compare myki fares to the cost of running a car, estimated to be $713.65 a month.  

Car repayments: $72.15 per week
A basic, reliable second hand car costs between $5000 - $8000 (and upwards from here.) Carsales.com.au are advertising a 2007 Honda Jazz for $7300 - manual or a 2005 Peugeot Hatch – auto for $5,990. They’ll do fine. Taking out a loan for such a car and you find the minimum car loan allowed online at ANZ is $7500. With repayments at 7.85%over 5 years, the weekly repayment is $72.15  

Fuel prices: $65 per week
As you know these vary greatly due to global economic forces beyond our control. If it is $1.00 per litre it is considered cheap. When it is upwards of $1.50 per litre it is considered expensive. Let’s imagine it is $1.30 and a full tank costs about $60. 

Registration $700 per year 
All vehicles must be registered to drive on the road. Registration starts at $700 per annum.

Insurance $500 per year
Insurance is intensely variable but we will estimate about  $500 for basic third party cover only at a competitive rate.

Car service $250
Cars also need to be cared for. Conservatively, a tune will cost $250 and required twice a year. 

Eating and drinking out

A standard pint, glass of house wine, or g&t is about $8.00 at establishments popular with millenials.  

At the lower end of Melbourne's eclectic range of eateries out there is Grill’d, Mexican, China town dumpling houses and Kebab shops where you can spend less than $15 on a meal.

Take away coffee is $3.50 - $4.00

A loaf of bread starts at $2.00 for the basic supermarket stuff. Gluten free loaves though, are priced at $7.00. For fresh and cheap, it’s roughly $3.50 for a bakers loaf from local hot bread kitchens.

How much should I budget each month?

  • Public transport: $145.08 
  • 2 nights out per week going cheap and cheerful: $100 or  433.33 per month
  • Houseshare and bills: $1020
  • Groceries: $217 per month
  • Clothes: $100 per month.

Living in Melbourne is possible on a tight budget. We've estimated you can get away with spending $1915 per month living out of home in the inner suburbs. If you have different priorities, you could even save more. Our Melbourne budget equates to $22,980 per year. It is possible on student and apprentice wages. Just make sure that every cent leftover goes towards savings.   

As you can see, if you make sensible choices Melbourne is a great city to live in, but besides the cost of living, the people you meet there will make it a memorable part of your life. 

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