This NRI couple in Melbourne wants to move back for family and affordability

While the quality of life in Melbourne is superior, it comes at a heavy price — both literally and metaphorically. “We miss family and the general lack of community the most. Australia is a lonely country. That’s the primary reason we want to move back,” said Saurabh. “Also, the cost of living as a percentage of net income is higher compared to India’s. We end up spending about 80% of our household income here. Back in India, expenses were less than 30%, including rent,” he added.

The drastic increase in the couple’s cost of living in proportion to their income is partly because their household income has decreased owing to a lack of career opportunities in Melbourne for Shubhangi, a human resources professional.

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“Shubhangi settled for a lower-paying job here as there weren’t many options for her. There are plenty of opportunities only in tech jobs, while in most other industries, employers give preference to those with local education and experience,” Saurabh said. “We have downgraded our lifestyles and our savings have been hit, only to lead an unfulfilling life.”

Cost of living

The couple spends more on everything in Melbourne than they did in India – from groceries to insurance and car maintenance – so they eat out less and take fewer holidays, Saurabh said. “For international travel, flights to any country are expensive as it’s an isolated sector. Even local travel feels expensive as we don’t get value for the money spent on luxury travel as the service and experience are sub-par.”

“I pay AU$2,607 (about ₹1.46 lakh) a month for a 400 sq m house that is 30 km from the city. In 2022, we were paying ₹26,000 for a 2,300 sq ft house in Gurgaon.”

Housing, both renting and owning, is significantly more expensive in Australia than in India. Saurabh said rentals are high because jobs are concentrated in three to four cities, which puts pressure on their housing markets.

“I pay AU$2,607 (about ₹1.46 lakh) a month for a 400 sq m house that is 30 km from the city, in a suburb. In 2022, we were paying ₹26,000 for a 2,300 sq ft house in Gurgaon. Rent here makes up 32% of our income, as opposed to 17% in Gurgaon,” Saurabh said. The upside, he said, is that they live in a standalone house, which is rare in Indian metros.

Prices of groceries and daily household goods are steep as well. Vegetables, milk, cereals and cooking oil cost 100-300% more in Melbourne, Saurabh added.

According to Numbeo, an online database of quality-of-life metrics, the cost of living, including rent, in Australia is 284% higher than in India.

Apart from fixed expenses such as rent, utilities and groceries, the couple has to shell out more on health insurance and pay a mandatory annual car registration fee of AU$1,000.

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In Australia, government-sponsored healthcare includes only physician consultations, tests and emergency response. To safeguard themselves against other healthcare costs, the couple has bought insurance with premium of AU$300 (about ₹16,800) a month.

“Health insurance is not mandatory but healthcare is exorbitantly expensive. Specialists such as cardiologists, urologists and paediatricians charge around AU$170 to AU$300 for a consultation. Hospitalisation for even one night leads to bills of several thousands. We have bought insurance to cover these expenses. However, even with such steep premiums we are not covered for extras such as vision and dental services,” he said.

Another major expense, which eats up almost 20% of the couple’s income, is childcare. Schooling in Australia cannot start before five years of age, so the couple sends their son to a private playschool for socialising and early learning. This costs AU$200 a month, or about ₹11,000.

Asked what they thought about going back to all the problems they wanted to escape by moving abroad, Saurabh said higher affordability in India could unlock a more convenient life for them.

“In India, even if we adopted a luxury lifestyle… we would still be better off financially than in Melbourne.”

“In India, even if we adopted a luxury lifestyle that included high-end schooling for our son, travelling every quarter, and living in posh, gated communities, we would still be better off financially than in Melbourne,” said Saurabh. “We plan to relocate to Bangalore, which has better living conditions than Gurgaon.”

Investments

The couple invests both in India and Australia, albeit more in the former. The majority of their investments are in equity.

They also maintain separate emergency funds in both countries. They had put aside money for contingencies when they worked in Gurgaon and have left it untouched. They have created a separate corpus in Melbourne which is locked in a fixed deposit equivalent. This fund is much bigger than the one in India, owing to the higher expenses. “It is to cover us in the case of a job loss,” said Saurabh.

In Australia, Saurabh only invests in exchange traded funds (ETFs), which have given him a handsome 32-55% compound annual return in the past two years. In India, apart from direct stocks and equity mutual funds, he has also invested in real estate investment trusts (Reits), sovereign gold bonds (SGBs) and cryptocurrencies.

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He uses Groww and Upstox for his mutual fund and stocks investments, respectively, and Western Union to transfer money to India. “It offers the best exchange rate and charges AU$2.99 fee for a AU$20,000 transfer, which is negligible.”

The couple does not take any professional help for their investments. Saurabh said they are saving up for a house, retirement and their son’s education. “I intend to buy a house after moving back to India. I will liquidate the ETFs I hold here to use the dollar savings to spend in rupees.”

Taxes and social security

Australia’s income tax system has five tax slabs and the highest rate is 45%. Saurabh pays a net 28% of his income in tax after factoring in deductions – similar to what he would be paying in India.

“Australia has less indirect tax, limited to 10% for most goods or services. It’s much lower than the 18-28% GST rates in India, which are punitive for the middle class.”

The difference, however, is that there isn’t an additional tax burden in the form of indirect taxes, said Saurabh. “Australia has less indirect tax, limited to 10% for most goods or services. It’s much lower than the 18-28% GST rates in India, which are punitive for the middle class.”

Capital gains are taxed at the slab rate, which is 30% for Saurabh. If the asset, including property, shares and cryptocurrency, is sold within a year, the full gains are taxed. If sold after a year, half the gains are taxed at the slab rates.

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Saurabh said the social security system in Australia is similar to that in the US, in which residents and citizens get few perks. “I only contribute towards superannuation, similar to EPF, for a retirement pension. Apart from that, we have to pay for all services,” he said.

The contributions made in superannuation so far will be given to Saurabh when he leaves Australia.

Note: This article captures Saurabh’s personal experience living in Australia. Career growth, expenses, income and other financial obligations may vary for others, depending on their personal circumstances.