The cheapest areas to retire to around Australia

Your household bills are determined by where you live

Australia’s least expensive address

One of the big surprises to emerge from the 2014 Household, Income and Labour Dynamics in Australia (HILDA) survey was that cost-of-living levels for retirees were determined by where they lived.

The Australian Centre for Financial Studies’ (ACFS) analysis of the HILDA data found that while “the level of household income has some influence on expenditure … household location appears to have a much greater impact’’.

If expenditure levels showed greater variation by location than by income groups, then clearly some parts of Australia were more expensive to live in than others. Unsurprisingly, rural areas had lower costs of living than the cities.

More than 2000 respondents over the age of 65 participated in the survey. About 25 per cent of them were totally self-funded, another quarter relied in small part on the Age Pension and about half were entirely reliant on Centrelink payments.

In geographical terms, the starkest contrast was between Sydney, where the average yearly household spend was $44,672, and rural South Australia, whose households averaged half of that expenditure at just $22,000. 

From those statistics, it is clear that the cheapest region to retire to is regional South Australia, while the capital of New South Wales is the most expensive.

The next costliest place is Perth, followed the Australian Capital Territory, then Brisbane and Melbourne, which are on a par. Next is the entire Northern Territory, then regional areas of Queensland, NSW, Victoria and Western Australia. Tasmania is the second cheapest place to live for retirees.

“The relationship between the variation in the cost of living by location and the level of household expenditure is an important finding of this study,” ACFS researchers said. “It suggests that location could be a critical piece of demographic information in the determination of a household’s required level of income for retirement.”

ACFS continued that the findings suggest “geographic location becomes an important consideration when estimating what income is required to achieve an adequate standard of living in retirement”.

“In addition, this study has shown how significantly expenditure levels vary by locations, reflecting differences in cost of living.

“Locational data – including for some superannuation funds with concentrations of members in a specific demographic location – may be extremely useful in future product design,” the researchers suggested.



    To make a comment, please register or login
    28th Dec 2017
    Its more complex than that.
    You would need to make a division between those who are home owners outright and those who still have a mortgage or are tenants.
    I think you will find the cost of living is comparable between States if housing is not included.
    In actual fact if South Australians earned less during their working life then they are less likely to have as much superannuation, less in assets and in more dire straits than their Sydney cousins.
    The Sydney cohort are selling their homes and buying mega mansions along the coastline. Trust me I am watching as our country town is turning into a concrete high rise. So sad.
    12th Jul 2018
    I agree Rosret - just spent time on the south coast of NSW, about 100kms south of Sydney. I am appalled and dismayed at the level of unit development taking place there - obviously to accommodate the hordes escaping Sydney, but the impact will be detrimental to both the environment, and the life style of long term residents of that area.
    28th Dec 2017
    I believe this is a totally erroneous conclusion! For people who own their own home, the level of expenditure in any any given location is not necessarily connected to cost of living. It can also depend on residents' past spending/savings patterns so their capacity and propensity for discretionary expenditure and the opportunities and to spend in any given location. A simple comparative example. More executive level people retired to Port Macquarie NSW (PM) than to Coffs Harbour NSW (CH) so the capacity for discretionary spending in PM is greater than CH but the costs of living are similar. Retirees to PM are more likely to travel overseas and have private health cover than the residents of CH. People who live in rural areas have fewer local spending opportunities (and lower propensity) and spend their money in larger cities but rural costs for food, clothing, travel and healthcare can be much higher. The case is far from conclusive.
    28th Dec 2017
    Have you seen rural wonder costs are low, nowhere to spend money.
    28th Dec 2017
    I have been living small rural town S.A just 20minutes from Gawler for about 27 years, moved from N.S.W for family reasons. Gawler is becoming a large shopping area now and I seldom go as far as Munno Para or Elizabeth. With the Clare and the Barossa Valley just 30 minutes away plenty of scope for spending money. however I do agree that living in beautiful S.A is so much cheaper than the other States .
    28th Dec 2017
    I don't know about that Greg, there is still the net, even out there.

    I reckon if I lived somewhere as horrible as out back SA, or Tasmania, I'd have to spend a fortune on mail order/internet purchases, just to make life seem worth living. At least you would have the mail truck to look forward to.

    28th Dec 2017
    "One of the big surprises to emerge from the 2014 Household, Income and Labour Dynamics in Australia (HILDA) survey was that cost-of-living levels for retirees were determined by where they lived."

    Isn't that bleedin' obvious?

    28th Dec 2017
    The last sentence of 3rd paragraph of the article nailed it ..... " Unsurprisingly, rural areas had lower costs of living than the cities".

    I live in a very isolated rural town of about 20,000 people. My only income is the single age pension and I can "easily" cope financially. Am I disadvantaged due to my location? NOT ONE BIT!!!! I have instant access to the entire world via phone, computer, TV, digital entertainment/education/information. My entire house/property cost me just under $50,000. ALL bills are cheap .... cheap electricity, cheap water, cheap council rates. I spend around $3 a week on petrol for my car. We have 2 big supermarkets and the prices are just as cheap as city supermarket prices. Been on the age pension for nearly 2 years now and my bank account is $12,000 more, and all of that $12,000 came from the pension.

    Living in a "real" rural area (not "pretend" rural areas like the NSW north coast etc etc) is dirt cheap. If a retiree thinks happiness comes from mansions and fancy cruises and lots of "stuff" then go for it ..... but don't then whinge about your costs.
    28th Dec 2017
    Where do you live Jim D?
    29th Dec 2017
    It's a bit rough calling outback S A & Tassie horrible Hasbeen. We recently drove through the area tiger lives in & it was quite nice, including Gawler, we were quite surprised at the size of it & the facilities there

    Join YOURLifeChoices, it’s free

    • Receive our daily enewsletter
    • Enter competitions
    • Comment on articles