Despite its famous beaches, great climate and world-class restaurants, huge numbers of people are quitting Sydney for one big reason.
Living in Sydney has become a financial nightmare and the ever-rising cost of housing, food and bills is forcing more and more people to call the city quits, new data shows.
Removalist comparison website Muval has released figures showing Sydney accounted for the most inquiries of any major city in the past year, averaging one-in-three outbound metropolitan moves.
It conducted research on what’s currently prompting people to move and found cost-of-living pressures account for 35 per cent of relocations – the highest of all factors cited.
A few years ago, Sydney businesswoman Renae Smith swapped her pokey two-bedroom house in Newtown in the city’s inner-west, which she rented for $500 per week, for a huge country home in Burgundy in the French countryside.
The “massive” property with five bedrooms, sprawling grounds and a pool, cost her “peanuts” compared to what she forked out back at home.
“I lived like a king,” Ms Smith, founder of the public relations agency Atticism, recalled.
“But it wasn’t just that the house that was cheaper – the lifestyle was cheaper. We’d drive to Nice for the weekend, fly to Barcelona for 15 euros (AU$25) and spend the weekend on the beach, or I’d get the fast train into Paris for the day.
“My life was so full, and at the same time, nowhere near as expensive as the nine-to-five grind I paid for in Newtown.”
There’s plenty she missed about Sydney – the beach and the comforts of familiar surrounds – but she doesn’t see herself moving back.
“I choose not to live in Sydney because it costs me more to have the life I want there. Instead, I put the life I want first and each day my motivation is to work towards doing less – not having more.”
According to Muval, the number of people ditching Sydney because of cost has increased three-fold increase on last year when 11 per cent of people moved to save money.
“Over the past 12 months, we’ve seen a dramatic increase in both interest rates and rents throughout the country,” Muval chief executive James Morrell said.
“Many Australians have hit the end of the road and with no buffer left, they have no choice but to make a big change as they seek out more affordable options. Our data is telling us that moving is one way [people] are combating the rising cost of living.”
Mass exodus of locals
The Muval findings mirror official figures from the Australian Bureau of Statistics.
Net interstate migration is a measurement that refers to the number of people who arrived from elsewhere in Australia minus the number of people who left.
In the year to March 2023, New South Wales lost 30,200 net people to other states and territories, according to the ABS.
That represented the largest net loss of residents to elsewhere in Australia of any state and territory.
In the 2021-22 financial year, ABS data shows a staggering net loss of 51,700 people from Sydney alone, although pandemic-induced trends contributed to that high number.
As of the end of last year, the NSW population sat at 8.23 million, growing by 1.7 per cent over 12 months – the second-lowest increase in the country, just behind South Australia (1.6 per cent).
Financial adviser Brenton Tong, managing director of the consultancy Financial Spectrum, has seen a “noticeable increase” in inquiries from clients keen to get out of town.
“It started with Covid when people could work remotely and just wanted a change, however with cost of living, it’s a choice that people are making for very different reasons,” Mr Tong said.
“A considerable number of our clients have discovered benefits such as more affordable housing, shorter commutes, improved work-life balance, and are in a better financial position as a result.”
In the lead-up to the last NSW election, then Opposition Leader Chris Minns described the mass exodus of people from Sydney as “a huge problem”.
Mr Minns, now premier, said the state should be attracting people from across the country, not losing them, and warning of the consequences of losing crucial skills.
“We can’t be in a position where NSW is experiencing brain drain,” he said. “We have a shortage of healthcare workers and teachers. This is a huge problem.”
When looking at the financial reality of calling Sydney home, it’s easy to see why many are calling it quits.
High price of housing
According to SQM Research, the median house rent in Sydney is $1011 per week, which is up a whopping 14 per cent over the past 12 months.
Meanwhile, the median unit rent has risen by 16.2 per cent year-on-year to reach $679 per week.
But finding a place to lease has become harder and harder, with the current vacancy rate – the proportion of all rental dwelling currently available – just 1.4 per cent.
For those hoping to buy, CoreLogic reports the median house price has surged by 11.5 per cent in the past 12 months to hit $1.39 million.
The median unit price is currently $836,220 – some seven per cent higher than it was a year ago.
Brenton Tong, managing director of advisory firm Financial Spectrum, said the high cost of housing has some clients considering an exit from Sydney.
“Unless you’re willing to have a million-dollar plus mortgage, the property market might be out of reach,” Mr Tong said. “Rents are also the highest in the nation and many families feel they are priced out of the market.”
Exorbitant living costs
Insurance comparison website Budget Direct keeps a running tally of estimated living costs in each Australian capital city and rates Sydney as the most expensive.
Grocery prices in the Harbour City are 2.2 per cent higher than the Australian average while renters pay an eye-watering 55 per cent more than the rest of the country.
Including accommodation, price comparison website finder.com.au estimates Sydneysiders fork out more than $4100 a month on average on living expenses.
All up, finder.com.au estimates the Harbour City is 22 per cent costlier to live in than Melbourne.
Accounting for all costs, Sydney was ranked at the 10th most expensive city in the world by the Economist Intelligence Unit.
Income not keeping pace
Generally speaking, it used to be that living in Sydney rewarded many workers a higher income than they could bag in most other parts of the country.
On paper, that remains the case, with salary insights provider PayScale reports the average annual salary in Sydney is about $80,000 per year.
But that’s only marginally higher than in Melbourne ($75,000), Brisbane ($73,000), Adelaide ($70,000), and Perth (77,000).
And on a statewide basis, the latest government data shows NSW is roughly on par with its major counterparts.
The average weekly full-time wage is $1831 per week, compared to $1832 in Victoria and $1791 in Queensland.
Greek Islands cheaper than Bondi
When her visa expired, Ms Smith and her family relocated to Britain while they plotted their next move.
“I couldn’t bear the thought of going back to Sydney,” she said.
“My business is there – so Australia is my day-to-day focus – but I had huge anxiety about the idea of going back to paying such huge amounts of money to live in Newtown.
“The UK is also ridiculously expensive. In short, I also hate it here. The weather is literally the worst and the food is averagely below par, unless you visit London and pay a million dollars for something nice.”
But the family agreed to use the UK as a base while travelling. Ms Smith said they spent a lot of time exploring small islands in Greece.
Earlier this year, while wandering through Lefkada, she and her husband spotted an ad in a local real estate agent’s window for a 4600sqm block of land on a hill facing the sea.
It was surprisingly cheap, so they bought it. Next year, they’ll build a comfortable home and make a new life for themselves in Greece.
“For less than what we spend in three months [in the UK], we will be able to live for an entire year in Greece. We can work less, pay less, and live more.”
It’s another dream reality that makes life in Sydney look like a nightmare – what Ms Smith describes as the need to “work like a dog” to make ends meet.
“I’d have to prioritise work and money, which goes against the lifestyle I want to live. I’d rather give up Bondi Beach and swap it for Lefkada in Greece, and work two days instead of six.
“It’s about priorities and for me. A slow, full life of sun, sea, family and good food is what I want. And I can’t get that in Sydney.”
Few cons, many pros
For younger Sydneysiders, living here means making huge sacrifices to cover the essentials like rent and food.
Olivia Eddy moved from New Zealand at the start of the year for work and found “the way money disappears could rival Houdini”.
“Despite my best efforts to save each month, I’ve been pocketing pennies.,” Ms Eddy said.
“Any savings are quickly eaten up as soon as any big expense arises. I had to sacrifice things like going home to see my family during the year. I also haven’t been able to do other things on my Sydney bucket list, such as a trip to the Blue Mountains or seeing a show in the Opera House.
“Meeting basic living expenses unfortunately had to come before these things.”
While the 22-year-old graduate PR professional has enjoyed Sydney itself, particularly the beach lifestyle, her pricey rent is $200 more per week than she was paying back at home.
“It’s incredibly pricey for someone on a starting salary, and often the choice comes down to meeting living expenses and making the most of a year in Sydney.”
Next year, Ms Eddy will move to Adelaide. Leaving Sydney so soon wasn’t something she planned, but “when looking at the budgets between the city cities, the choice was easy”.
“My rent will already be $100 a week less, allowing me to save an extra $400 a month. Add to that, I’ll be remote working, so no commute costs, and being at home means no sneaky bought lunches, coffee, or snacks.
“Other costs for activities are also lower than Sydney such as gym fees, transport, and entertainment. I expect my weekly costs to significantly decrease due to this.”
For the stage of life she’s in, staying in Sydney “is not sustainable”. She’ll miss Sydney but said she’s excited to move – “as is my bank account”.
Financial Spectrum has worked with a range of people who’ve ventured out of Sydney to cheaper pastures, with most embracing tree- and see-changes in the regions.
One client, Sheree Myers, lived with her family in Lane Cove until last year when they headed north to Newcastle, settling in the suburb of Warners Bay.
“We’re in the best financial position we’ve ever been in,” Ms Myers said.
“We left for lifestyle, to live close to both a business hub and the beach, [and] in an area where we could afford to buy property.”
The rise of remote working allowed professional Melissa Gole to ditch Sydney and her lengthy daily commute in Sydney for a sea-change in regional city Port Macquarie.
“Instead of commuting to and from work, I now start my day with a morning swim and unwind with a beach walk with my kids,” Ms Gole said.
“But the thing I appreciate the most is being able to enjoy breakfast and dinner together as a family. The benefits to my health and family have been enormous and we’re in a much better position financially too.”
While remote working is available for some jobs, “this isn’t always the case”, Mr Tong pointed out, and in some cases, it’s being phased and replaced with full-time office attendance or a mix of both.
“Moving is a big decision and there is a lot to factor in if you choose to leave Sydney,” he said.
“Check the cost of living elsewhere, job opportunities, housing prices, proximity to children’s education and other amenities. Weigh up the pros and cons, talk to others who have made the move, and speak to a financial adviser to model out the financial impact of leaving versus staying.”
Although, Mr Tong said of all his clients who’ve left Sydney, “not a single one wants to move back”.
Regional areas rate highly
Many of those who leave Sydney head to smaller towns where housing tends to be cheaper and living costs are generally lower.
The Regional Australia Institute said 80 per cent of all people who left cities from regional areas in the past year came from Sydney.
“In the 12 months to September 2022, it was just over 60 per cent,” the group’s chief executive Liz Ritchie said.
“Good regional job prospects and the likelihood of better house prices and availability are attracting many people to these more remote regional growth hotspots.
“Digital connectivity also means that where you are is less relevant today. As a result, it’s likely many millennial small business owners are choosing to take advantage of the increasing investment and interest in regional development.”
Data trends indicate that the bigger cities get, the stronger the draw to regional areas becomes, Ms Ritchie said.
In the year to September, capital city to regional area migration accounted for an 11 per cent share of all moves, larger than the 9.1 per cent of people who moved from the regions to a city.
Migration data shows “the exodus of people from capital cities” that occurred during Covid has persisted and rates are now 11.7 per cent higher than pre-pandemic, Ms Ritchie said.
Regional New South Wales has overtaken regional Queensland and claimed the title of being the most desirable location for metropolitan movers, according to September quarter data.
“Regional centres are buzzing with business activity and investment and offer the lifestyle benefits of a regional location – more affordable housing, cheaper cost of living, less traffic congestion, strong community connections – within comfortable commuting distance of capital cities,” she said.
During Covid, Queensland experienced a population boom on the back of historically high levels of interstate migration.
In the year to March, some 31,000 people relocated to the Sunshine State from across Australia, accounting for a total of the state’s total population growth in that period.
