What’s cheaper – city living, suburbs or country?

What saves more money living in a home in the suburbs or living in an inner-city apartment?

In 2015, we moved from a large 4 bedroom home with a huge backyard, our own chickens, a swimming pool and lots of space in the suburbs of Canberra to a tiny 2 bedroom unit right in the heart of Melbourne. It was a drastic lifestyle change resulting in not only a higher income but also lower living expenses.

I’ve since moved elsewhere and lived in the islands but now settled in Noosa, so can compare city vs suburbs in a few places. This post is mainly based on the Canberra to Melbourne experience.

A few months into the move I did a comparison of our expenses and lifestyle city vs suburbs. Hearing how expensive the city is, why it is better for kids in the suburbs etc. I thought it would be interesting to compare.

Both the city and suburbs have benefits. It was astronomically cheaper for us in the city and we prefered the lifestyle of inner-city living for that time. Now, we prefer living by the beach.

City vs Suburbs - which is cheaper-

Here’s the breakdown comparison for different areas of our budget for a year

I kept track of my expenses in Canberra and did the same in Melbourne. After a few months I compared but it wasn’t until a year in that I did this full comparison to ensure it was accurate.

Rent $24,230 vs $29,400

In the suburbs, it was 4 bedrooms, 2 bathrooms – one with a spa, 2 living areas, 2 dining areas, a double carport, swimming pool and backyard. It cost $540 a week, however, sometimes one of the rooms was rented out for $200 a week, helping me save on rent. In total, I made $3,850 on renting out a room at times in a 12 month period (I wrote about it more here and how to make your mortgage pay for itself).

In the city we lived in a small 2 bedroom apartment for $600 per week. Only one bedroom had built in robes. It had a European laundry then a shower, toilet and vanity in the bathroom. The kitchen wass a tiny half galley kitchen and the living area had enough room for a 2 seater futon, 4 seater dining table and work desk. We have rented it out on AirBnB a few times when we were away and made a total of $1,800 when we did.

Transport $20,708 vs $2,513

In the suburbs, we required two cars which meant two lots of insurance ($1,680), registration ($2,228), services (last year it was $2,500 for services and replacing tyres), a personal loan on one car ($100 per week), petrol for both ($150 per week) and parking of $25 per week. The total cost was $20,708. This doesn’t include saving for the eventual replacement of either car or depreciation of the current cars value.

In the city we sold our main car, immediately clearing the loan plus providing a savings buffer. The other car was stored at a friends house out of the city and has been used 4 times in the last 6 months then later sold. It cost $1,028 a year to register, $285 to insure, $200 for a service and for the first 6 months petrol has been under $500, assuming it continues as is the total for petrol is less than $1,000 for the year. That’s a total of $2,513.

In the city we walk everywhere, use free public transport and occasionally used Uber (if you choose to use Uber, use the code kyliet591ue to get a free ride). We spent $200 in 6 months on public transport, the bulk of that was spent in the first three months of the year due to moving and sorting a few things out.

Read how to live without a car and tips to reduce the cost of transport for more ideas.

Groceries $15,600 vs $7,800

In the suburbs, we didn’t have access to the markets we do here and prices were more expensive for many of the items we buy. We had chickens yet it didn’t make much of a difference once you took into account their food and straw etc. Overall we spent around $300 per week on food there compared to $150 per week in the city.

However, it is very easy to slip into a takeaway lifestyle in the city and overspend massively. We could easily spend $600+ if we ate out as often as we felt like it because everything is so close and easy to get eat at.

Check out how to get groceries for free and super cheap for a few ideas.

Insurance – equal

Health insurance, home and contents insurance and car insurance all changed when we moved. For starters, we dropped one car insurance as mentioned and included in calculations in transport. Health insurance was impacted by a rate rise, aside from that the price difference was negligibly cheaper in the city. Home and contents insurance is exactly the same despite now living in a fully secure complex.

Entertainment $5,200 vs $1,560

In the suburbs, we had to drive to anything we wanted to do, we weren’t close to many festivals and typically went to a restaurant and movie or something like that. We spent on average $100 a week on entertainment.
In the city, we have free festivals and events all the time. Our entertainment has dropped to around $30 a week if that.

Health $1,496 vs $0

We paid for one gym membership when living in the suburbs plus had the upkeep of the swimming pool (chemicals, salt etc cost around $300 for the year we were there). Now we have two gyms in our complex, along with a pool, spa and saunas and other amenities all included in the rent.

My daughters participate in rock climbing and the price was the same in the suburbs as it is here in the city.

Read how to afford medical expenses while living on Centrelink or a low income for tips.

Bills $7,045 vs $1,440

Gas, electricity, water, phone, internet and other bills are slightly different here compared to the suburbs.

The last two quarters of 2015, there was an issue with the gas heater resulting in a $3,400 gas bill for 6 months. Prior to that, it was around $400 a quarter. Electricity was high at $600 a quarter there even though the heating and hot water were gas and the pool was solar-powered. Water was $445 for the year. With the internet, where we were we had to pay for a phone line as well. Here in the city, we don’t, we upgraded to an unlimited plan though so the cost is equal.

The gas, electricity and water combined were $7,045 for the 12 months of 2015. Without the gas issue it still would have averaged $4,445 for the year.

In the city our bills are averaging $1,440 total for the year. We get billed monthly and even when using the heater or air conditioner it has remained around $120 a month.

Our mobiles haven’t changed.

Check out 17 tips to reduce the cost of electricity.

Time and opportunity cost

Living in the suburbs I spent more time commuting when needed, it even took longer to get our daughters to and from school than it does to walk them to and from school here. I spent more time in traffic, more time trying to find a park and time arranging the service on the car, filling the car with petrol, cleaning it etc.

Living in the suburbs my house was huge and I had to clean it all. We hoarded so much more stuff because there was too much space to store it in. The upkeep of the gardens and house in general was too much for me. The house was old and even if you did a deep clean, it still felt dirty. Paying a cleaner was huge. When I got sick my sister helped clean which was a relief and greatly appreciated.

I spent hours every week cleaning and maintaining the house and car along with travelling in the car.

In the city I have more time, I spend less time cleaning and it is easier to clean our small space. We sold off virtually everything we owned and our unit came fully furnished. We don’t buy much because we don’t have the space for it.

Medical

In the suburbs, my doctor cost more than my current doctor. The waitlist for treatments I need in the suburbs was extensive so we went private, costing thousands. I found out here the public list is only a few weeks here and because of pre-existing conditions I am top of the list immediately.

All the medical care I need is located in one building except for hospital care which is a 10 minute walk away. This alone has been huge for us. I am yet to go through the treatment I need this year as it is due in August, so will add the comparison for it then.

Total costs

Overall the expenses above cost us $74,279 to live in the suburbs, not including the insurance which was the same for each location. We could have reduced this by renting somewhere smaller and cheaper, downsizing the cars, choosing not to do movies and restaurants etc.

In the city it costs us $42,713 to live, which could also be reduced by renting a cheaper apartment, getting rid of the car we barely use and choosing to do no entertainment. That said, moving costs so take that into account when doing your own comparisons. F

I save hours every week by having a smaller place.
We also save on business expenses as our complex includes meeting rooms we can book and use as needed, plus a huge dining room with commercial kitchen for parties and a private lounge area.

Previously we paid $200 to $2,000 to book similar when living in the suburbs. This is a business expense though so I didn’t include it in our comparison above. It’s another $7,400 saved this year already and one of the reasons we opted to live where we do for a slightly higher rent compared to one of the cheaper 2 bedroom apartments available.

Summary

This isn’t a totally fair comparison as we have gone from a large home to a small one. We are saving over $30,000 a year by living where we do now and have a higher quality of life with more time as a family, more fun and a healthier lifestyle. Plus, our incomes are double here what we had in the suburbs.

Take the time to truly evaluate how you live, how much each aspect of your life costs and how making some changes, moving house, downsizing or moving to a different area would impact on your life.

What are your thoughts? Do you live in the suburbs or the city? Have you done a tree change?

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    12 Comments

    1. I live in a city now with my sister and I can also say that we have saved a lot not because of the expenses but because there are high chances of job opportunities for us in the city than in the suburb thus making us earn more.

      • True, job opportunities are a big factor. We earn three times what we were earning before since moving and are both in line for an increase in the next few months. This wouldn’t be the case where we used to live.

    2. I’ve lived in several states and it really depends upon the state and the city/suburb and why you are there. We are from big cities so when we moved to a smaller large city, we were surprised at how much cheaper most things are: housing for one. BUT we were also surprised at how much more expensive some of the utilities were in the smaller city. Most places you live will depend upon the commute to work. When we lived in S. Cal., we lived in the suburbs but it was FAR because it was the only place left there to get affordable housing. My dh drove 90 miles to work and back and the home trip was often over 2hrs. You have to also figure in gas and things like that as well. Will be different for each person.

      • The cost of utilities varies a fair bit in Australia too, especially electricity and petrol. The more rural you go the higher the price because they have to truck everything in. Definitely need to factor those extra commute expenses in when working out the cost of housing.

    3. I am the opposite we moved from the city to the country and it has it’s pros and cons. I think it depends where in the country or city you move to. I did like your break down and it has made me curious about how that would look like for us. Going to do a break down and see what the difference has been since we moved.

      • True, it does depend on where you are. I’ve lived in multiple cities and states in Australia, the prices didn’t vary a lot unless you went quite rural where housing was cheaper but food and petrol was astronomical. It’s an interesting exercise to do because it varies for everyone.

    4. That’s a lot of savings! I live in the suburbs now after living in a bigger city and agree that we spend way more on transportation, entertainment and food now than we did before! A lot to think about!

      • It is interesting isn’t it? And the savings shocked me when I sat down to work it out. I mean I was aware because we were saving more and felt more financially secure. Eye opening to write it out.

      • It’s interesting. NYC can actually be really cheap to live in. I have loads of friends there. The city I am in has been in the top 10 most expensive cities in the world for years. I think some of it comes down to lifestyle, but I know most I have spoken to say their housing was cheaper but everything else such as transport, entertainment and food went up drastically outside the city.

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