This NRI couple from Melbourne is looking to move back to live with their family and have more affordable housing

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

The couple’s dramatic increase in living costs relative to their income is partly due to their household income falling due 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 because 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 lifestyle and our savings have taken a hit, only to lead an unfulfilling life.”

Cost of living

The couple spends more on everything in Melbourne than in India – from food to insurance and car maintenance – so they eat out less and take fewer holidays, said Saurabh. “In international travel, flights to any country are expensive because it is an isolated sector. Even local travel seems expensive to us because we don’t get value for money spent on luxury travel as the service and experience is poor.”

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

Housing, both rented and owned, is significantly more expensive in Australia than in India. Saurabh said rents are high because jobs are concentrated in three or four cities, putting pressure on their property markets.

“I pay AU$2,607 (approximately ₹1.46 lakh) per month for a 400 sqm house which is 30 km away from the city, in a suburb. In 2022, we were paying ₹“In Gurgaon, rent accounts for 32% of our income, compared to 17% in Gurgaon,” said Saurabh. The advantage, he said, is that they live in an independent house, a rarity in Indian metropolises.

Prices of food and everyday household items are also high. Vegetables, milk, cereals and cooking oil cost 100 to 300 per cent more in Melbourne, Saurabh added.

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

On top of fixed costs such as rent, utilities and food, the couple has to shell out more money for health insurance and pay a mandatory annual car registration fee of A$1,000.

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In Australia, government-funded healthcare includes only doctor’s appointments, tests and emergency response. To protect themselves from further healthcare costs, the couple has purchased insurance with a premium of AU$300 (approximately $100). ₹16,800) per month.

“Health insurance is not compulsory, but healthcare is exorbitantly expensive. Specialists such as cardiologists, urologists and paediatricians charge between AU$170 and AU$300 per consultation. A single night’s hospital stay can result in bills of several thousand dollars. We have taken out insurance to cover these costs, but even with such high premiums we are not covered for additional services such as vision and dental services,” he explains.

Another major expense, which eats up almost 20% of the couple’s income, is childcare. Education in Australia cannot begin before the age of five, so the couple sends their son to a private nursery to socialise and learn at an early age. This costs AU$200 a month, or about AU$100. ₹11,000.

When asked what they thought about going back to all the problems they wanted to escape by moving abroad, Saurabh said that greater affordability in India could allow them a more convenient life.

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

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

Investments

The couple invests in both India and Australia, although more in the former. Most of their investments are in stocks.

They also maintain separate emergency funds in both countries. They had set aside money for contingencies when they were working in Gurgaon and have not touched it. They have created a separate fund in Melbourne that is locked in an equivalent fixed deposit. This fund is much larger than the one in India, due to higher expenses. “It is to cover us in case of job loss,” said Saurabh.

In Australia, Saurabh invests only in Exchange Traded Funds (ETFs), which have given him attractive compounded annual returns of 32-55% over the past two years. In India, apart from investing directly in 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 stock investments respectively, and Western Union to transfer money to India. “It offers the best exchange rate and charges a fee of AU$2.99 ​​for a transfer of AU$20,000, which is negligible.”

The couple is not seeking professional help for their investments. Saurabh said they are saving to buy a house, retire and pay for their son’s education. “I plan to buy a house when I return to India. I will liquidate the ETFs I have here to use the dollar savings and spend them in rupees.”

Taxes and social security

Australia’s income tax system has five tax brackets, with the highest rate being 45%. Saurabh pays a net 28% of his income in tax after taking deductions into account, similar to what he would pay in India.

“Australia has lower indirect taxes, capped at 10% for most goods and services. This is much lower than the 18-28% GST rates in India, which are punitive for the middle class.”

The difference, however, is that there is no additional tax burden in the form of indirect taxes, Saurabh said. “Australia has fewer indirect taxes, capped at 10% for most goods and services. This is 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, which includes property, stocks and cryptocurrencies, is sold within a year, the entire gains are taxed. If it is sold after a year, half of 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 United States, where residents and citizens get few benefits. “I only contribute to superannuation, similar to EPF, to get a retirement pension. Apart from that, we have to pay for all the services,” he said.

The contributions made so far towards his pension will be paid to Saurabh when he leaves Australia.

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