Cost of Living Comparison
One of the most common questions I’m asked is about the cost of living in Auckland compared to the US. Is it really as expensive as some people claim? Here is my resounding answer: it depends. It depends on where you are moving from and it depends on how American you want to keep your lifestyle. We moved from Austin, Texas to Auckland, New Zealand. Austin is, overall, nearly 20% more expensive to live in than the US average. It is the most expensive city in Texas, but it is still less expensive than other places like New York, Chicago, Los Angeles, etc. According to Expatistan’s world rankings of expensive cities, Austin ranks 61st while Auckland ranks 27th worldwide.
Housing - Housing in Auckland is notoriously expensive. You can check out my posts on renting and buying to get down on the nitty gritty of finding houses here. We’re now in a wonderful home in Auckland that is the same value as the home we left in Austin. Is it a little smaller? Yes. Is it a house we love? Also yes. We traded space for location and love that we can live a very Kiwi life, enjoying stunning public spaces and outdoor living. Here’s an interesting factoid to take into consideration with housing costs, though: the annual rates we pay on the same value of house that we had in the US is 12% of what we were paying in property taxes back in Texas. Property taxes in Texas are extraordinarily high, but the annual overall savings in Auckland are huge because we don’t have that enormous tax bill anymore. Something else to consider is that because most houses are cooled naturally - meaning with open windows and doors - our electricity bill is substantially lower in the summer than in our central air conditioned Texas house.
Health - Health care in the US is the most expensive in the world. The healthcare we’ve received in Auckland has been just as good - if not better - and at a fraction of the cost. Instead of paying $2,000 a month plus an annual $13,000 deductible in the US, we pay NZ$162 (about US$130) for health insurance that we haven’t ever had to use because so many things are already covered by the national health plan. ACC covers accidents, and under 13 healthcare is free. Plus prescriptions are typically capped at NZ$5 for adults.
Transportation - This one is split. When it comes to purchasing cars, Auckland can be as inexpensive or as expensive as you want. Many of the same cars I found to be less expensive here than in the US. However, fuel (petrol) is much, much more expensive than what we’re used to in America. On the flip side, because Auckland is a much more biking and public transportation friendly city, we have a much greater ability to take alternate forms of transport around town. Auckland doesn’t have anything like a robust metro or subway system, but it is better than your average Texas city.
Food - I may get some heat for this answer, but our food bill has gone down moving to New Zealand. (You can get a good idea on grocery store pricing by checking out my Grocery Haul posts.) There are two reasons for this. First, in the US I didn’t buy nonorganic produce. I was wary of the chemicals and farming practices the US allows and so I ended up spending a ridiculous amount of money on only organic items. In New Zealand, I tend to buy locally grown, seasonal produce. Organic produce is much less prolific here, but farming practices tend to be slightly more environmentally friendly so I feel more comfortable getting nonorganic items. Secondly, I don’t buy a lot of prepackaged stuff or insist on American brands which keeps cost down. Goods that must be shipped in are going to be more expensive because New Zealand is far away from everything. If I insisted on eating all American brands, however, my food costs would be ridiculously high.
When it comes to eating out, I generally think it is less expensive here, too. An average coffee from a coffee shop in Austin would cost me US$5 + tip. Here? It’s NZ$4.50 (or about US$2.88) with no expected tip. A casual lunch with friends at a sit-down restaurant with table service would cost about NZ$25 (US$16), again with no expected tip. The same meal in the US would be able US$15, but with an additional tip of around $3 making it slightly more expensive. The fanciest meal we’ve found in Auckland (at The French Café, which you will note I have NOT done a restaurant rec on) would be about 25% more expensive for something comparable in Austin. What is noticeably more expensive are fast food chains, and I understand why people complain about expensive food costs when it comes to Taco Bell or McDonald’s. If that’s not part of your regular diet (and for us, it isn’t) then eating out isn’t as atrocious as you might think based on online griping.
Goods - If you’ve perused any of the Where Is It More Expensive posts, you know that goods are generally more expensive here than in the US. High shipping costs and 15% GST guarantees that more often than not, “things” are more costly - with the bizarre exception of Lululemon clothing. I’ve learned to shop smarter and with more forethought, which I think is a good thing overall. However, there are certainly times when I’ve been frustrated, especially when I’m looking for something unique and end up paying a ridiculous amount of money to ship it here. (Here’s looking at you, Santa gifts for 2020!) While goods are pricier, I feel like this category is so variable that overall it isn’t terrible. Plus, I feel like I can afford these markups and higher sales tax because I don’t have some other huge expenses - namely healthcare - to cover.
Income Tax - This gets very complicated, very fast. My only words of wisdom are to get professional help, especially your first year. In New Zealand the current individual tax brackets (which I believe will be changing soon) are:
Up to NZ$14,000 (about US$9,900) - 10.5%
Over NZ$14,000 up to NZ$48,000 (about US$34,080) - 17.5%
Over NZ$48,000 up to NZ$70,000 (about US$49,700) - 30%
Over NZ$70,000 - 33%
In the US, there are currently seven brackets. I’m showing the individual breakdown for comparison’s sake
Up to US$9,875 - 10%
US$9876 - US$40,125 - 12%
US$40,126 - US$85,525 - 22%
US$85,526 - US$163,300 - 24%
US$163,301-US$207,350 - 32%
US$207,351-US$518,400 - 35%
Over US$518,401 - 37%
So it really depends on where you fall on the scale as to how you will be affected by income taxes, and things get even more complicated if you’re a taxed based on citizenship rather than residency (and this only applies to the US and Eritrea) Make sure you familiarize yourself with all of the fine print to make sure you are following all of the rules and regulations surrounding taxes both in New Zealand and your home country. I will say that being an American living abroad, one expense that has most definitely gone WAY up is the cost for tax preparation each year. That one is painfully higher now.
Overall, our expenses have gone down, mainly because our lifestyle in New Zealand is different than in the US. But I don’t feel like I’m missing out on much and only occasionally have pangs of Amazon Prime addiction. (But yes, Amazon does ship most things here. It takes around two weeks and shipping isn’t free, but you can, in fact, get a caticorn shaped stapler if you need one.) When calculating your expenses, make sure to look at the overall picture and take the exchange rate into consideration. We’ve found it isn’t nearly as bad as the internet would have you believe.
Very interestingly, just days after posting this, a new report came out listing Auckland as the forth least affordable housing market in the world behind Hong Kong, Vancouver, and Sydney. You can read a brief overview about it here or the full report here. I’d remind you to keep in mind that housing is just one factor of a budget.
