Australia's wealthiest city centre residents

Australian cities do exceptionally well in most global liveability surveys and rank highly in terms of cost-of-living. But in what Australian cities do city residents have the most expendable income?

Australian CBD residents ranked by monthly income remaining after mortgage or rent costs are paid

The chart above ranks key Australian city centres in order of median monthly income remaining after their residents have paid their mortgage or rent. At the top of the ranking are the resource state capitals of Perth and Brisbane. Their city centre residents have median non-housing money levels each month of $3,239 and $3,055 respectively. Darwin is not far behind with a whopping $2,991.

Sydney CBD has the highest rent and mortgage levels of all of the city centres, yet its residents earn less than both Perth and Brisbane CBD residents, leaving downtown Sydneysiders with a median $1,755 to spend each month. Melbourne CBD housing costs are the lowest of all of the four biggest Australian cities, however its income levels are also the lowest, leaving its residents with a mere $1,550 to spend in Melbourne’s cafes and bars. As an aside, Melbourne is the youngest Australian CBD, which goes some way to explain the relatively low expendable income levels.

The following table shows the data for all eight cities during the census years of 2001, 2006 and 2011. The data has been adjusted to 2011 levels using Reserve Bank of Australia CPI data to allow a fair comparison across years.

	Sydney	Melbourne	Brisbane	Perth	Adelaide	Darwin	Hobart	Surfers Paradise
2001	$1,770	$1,956	$2,236	$1,778	$2,028	$3,038	$1,835	$1,718
2006	$1,549	$1,408	$2,651	$2,397	$1,815	$2,970	$2,131	$1,948
2011	$1,755	$1,550	$3,055	$3,239	$1,496	$2,991	$2,160	$1,558

Sydney

Melbourne

Brisbane

Perth

Adelaide

Darwin

Hobart

Surfers Paradise

2001

$1,770

$1,956

$2,236

$1,778

$2,028

$3,038

$1,835

$1,718

2006

$1,549

$1,408

$2,651

$2,397

$1,815

$2,970

$2,131

$1,948

2011

$1,755

$1,550

$3,055

$3,239

$1,496

$2,991

$2,160

$1,558

Australian CBD residents ranked by monthly income remaining after mortgage or rent costs are paid, 2001-2011 in 2011 Australian dollars

Note the huge real income increases in Brisbane and Perth between 2001 and 2011, and the general plateauing elsewhere.

But what does this all mean? Some potential side effects could include:

• It could indicate that housing is underpriced in Perth, Brisbane and Darwin, given that their CBD residents can clearly afford more, relative to Melbourne and Sydney residents 
• Or, perhaps housing is significantly overpriced in Sydney and Melbourne? 
• The resources boom is likely to be the main reason for the growth in wealth in Brisbane and Perth CBDs. These cities are the key fly-in fly-out (FIFO) bases in Australia. 
• Perhaps Brisbane and Perth's increase in CBD resident wealth can be partly explained by wealthy people moving in from the suburbs. 
• An increase in demand for luxury goods in Brisbane and Perth can be expected since 2001. Anecdotal evidence of this is visible with the recent introduction and refurbishment of many luxury brand stores in Brisbane and the recent reopening of the Wintergarden indicates a resurgence in higher-end consumption.

If anyone is interested, this measurement is calculated using the following method (underlined values are taken directly from the 2011 Australian census data):

Median Individual Non-Housing Cash Remaining Per Month in 2011 Australian Dollars = (A - B) / G
Median Individual Housing Cost Per Month in 2011 Australian Dollars  = H / G

A = Real Median Household Income (Monthly) = (Weekly Median Household Income * 52) / 12
B = Weighted Median Monthly Housing Cost ($/monthly, Real 2011 levels) = (C * D)+(E *(1-D))
C = Real Median Mortgage Repayment ($/monthly, Real 2011 levels) = Median Mortgage Repayment ($/monthly) * X
D = Mortgage to Rent Count Weighting = Percentage of dwelling structures with mortgage vs rented
E = Real Median Rent ($/monthly, 2011 levels) = (F * 52) / 12
F = (Real Median Rent ($/Weekly, 2011 levels) = Median Rent (Weekly) * X
G = Average Adults Per Household (15 years and over) = Average Household Size * Percentage of residents 0-14 years old
H = Weighted Median Monthly Housing Cost ($/monthly, Real 2011 levels) = (C * D)+(E * (1-D))

X = CPI inflation ratio for year