The Burrow
Apr 14, 2025
Cost of living has become more poignant recently, following continued increases in transport and material costs, supply chain disruptions, and additional pressure on property markets thanks to a resurgence in migration.1
As experts in helping Australians to compare home loans, we looked at 11 different factors across 42 economically-developed capital cities to determine the most cost-effective places to live in globally.
This represents the first update in our cost-of-living index for 2025. Here are the results.
Seoul was named the most cost-effective city to live, with the lowest rent price increase out of all 42 cities studied at only 8.00% since 2015.
The city boasts a low unemployment rate (2.70%), cash rate (2.75%), and average electricity rates (AU$0.20 per kilowatt-hour (kWh)), which allowed South Korea’s capital to be at the top.
Despite this, in comparison to other cities, Seoul still had a relatively high cost of milk and bread, and lower average annual wages.
Brisbane ranked the second-most cost-of-living friendly city with the help of ultra-low $0.50 public transport fares – just behind Luxembourg which has offered free public transport access since 2020.2
Additionally, Australia’s average fuel prices were comparatively cheaper at $1.64 per litre for 95 RON unleaded petrol, the unemployment rate sits at a low 4.10% and rent prices have experienced a 19.00% increase since 2015.
However, Queensland’s ‘River City’ saw higher than average costs for electricity, milk, bread and the cash rate, despite the latter starting to come down since February 2025.
Madrid benefits from a low 2.65% cash rate, 12% rent price increase since 2015, and $4.38 average cost to buy a cup of coffee.
The Spanish capital also scored highly with a lower cost to buy grocery staples – milk and bread.
However, average annual wages and the price of petrol were below average.
Copenhagen was indexed as the least cost-of-living friendly city with the highest price of purchasing a coffee, at AU$9.98 on average, out of all 42 major cities studied.
Other costs among the highest globally included the price of petrol at $3.34 per litre, a bottle of milk at $3.24, and a bread loaf at $5.99.
However, Denmark has a better than average cash rate, house and rent price increases, and average annual wages compared to other locations.
Reykjavík ranked the second-least cost-effective city to live with the most expensive prices for transport – $3.69 per litre for petrol and $7.67 for a typical one-way public transport fare.
Similarly, the city didn’t perform well due to a 150% house price increase since 2015, high 8.00% cash rate, and $8.92 for a typical cup of coffee.
Yet, even with high annual wages, low unemployment and low electricity rates, these cost-of-living friendly factors still weren’t enough to land Iceland’s capital higher up the list.
Dublin placed third-last in the cost-of-living index, driven by one of the highest energy rates in the index at $0.59 per kWh.
This is intensified by high fuel costs at around $3.08 per litre, sizable coffee prices set at $6.92 on average, and the typical renting price being increased by 70.00% since 2015.
Despite these factors, Dublin’s cash rate is a low 2.65%, while the price of milk and public transport were considered average relative to other cities.
| Rank | City, Country | Cash Rate (%) | Average Annual Wage ($) | Unemployment Rate (country, %) | Average Fuel Price ($ per litre) | Average Electricity Price ($ per kWh) | Typical Public Transport (one-way fare, $) | Typical Milk Price (1 litre, $) | Typical Bread Price (500g white loaf, $) | Typical Coffee Price (cappuccino, $) | House Price Increase (since 2015, %) | Rent Price Increase (since 2015, %) | Overall Index Score (/10) |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 1 | Seoul, South Korea | 2.75 | 77,367 | 2.70 | 2.03 | 0.20 | 1.63 | 3.23 | 5.12 | 5.56 | 10.00 | 8.00 | 6.59 |
| 2 | Brisbane, Australia | 4.10 | 105,810 | 4.10 | 1.64 | 0.38 | 0.50 | 2.42 | 3.49 | 5.61 | 53.00 | 19.00 | 6.56 |
| 3 | Madrid, Spain | 2.65 | 80,952 | 10.40 | 2.58 | 0.36 | 2.58 | 1.79 | 2.38 | 4.38 | 61.00 | 12.00 | 6.09 |
| 4 | Ankara, Türkiye | 42.50 | 63,423 | 8.40 | 1.93 | 0.07 | 0.85 | 1.47 | 1.16 | 4.65 | 721.00 | 275.00 | 5.98 |
| 5 | Melbourne, Australia | 4.10 | 105,810 | 4.10 | 1.64 | 0.38 | 5.50 | 2.12 | 3.82 | 5.43 | 53.00 | 19.00 | 5.95 |
| 6 | Mexico City, Mexico | 9.50 | 32,286 | 2.60 | 2.01 | 0.15 | 0.47 | 2.45 | 4.16 | 5.19 | 105.00 | 30.00 | 5.94 |
| 7 | Bogotá, Colombia | 9.50 | 44,570 | 9.70 | 1.61 | 0.34 | 1.16 | 1.92 | 2.30 | 2.73 | 176.00 | 46.00 | 5.85 |
| 8 | Bratislava, Slovak Republic | 2.65 | 50,038 | 5.10 | 2.65 | 0.33 | 1.89 | 1.76 | 2.69 | 4.72 | 82.00 | 25.00 | 5.77 |
| 9 | Sydney, Australia | 4.10 | 105,810 | 4.10 | 1.64 | 0.38 | 5.00 | 2.58 | 4.18 | 5.15 | 53.00 | 19.00 | 5.73 |
| 10 | Prague, Czechia | 3.75 | 58,921 | 2.60 | 2.44 | 0.54 | 2.06 | 1.74 | 2.16 | 5.04 | 122.00 | 45.00 | 5.69 |
| 11 | Luxembourg City, Luxembourg | 2.65 | 141,554 | 6.40 | 2.51 | 0.36 | 0.00 | 2.57 | 5.23 | 7.05 | 62.00 | 13.00 | 5.68 |
| 12 | Warsaw, Poland | 5.75 | 64,730 | 2.60 | 2.51 | 0.37 | 1.80 | 1.76 | 2.13 | 6.43 | 109.00 | 70.00 | 5.67 |
| 13 | Santiago, Chile | 5.00 | 58,318 | 8.40 | 2.18 | 0.27 | 1.39 | 1.92 | 2.50 | 4.95 | 104.00 | 44.00 | 5.62 |
| 14 | Chicago, USA | 4.50 | 126,334 | 4.10 | 1.41 | 0.28 | 3.95 | 1.59 | 6.57 | 8.97 | 96.00 | 49.00 | 5.53 |
| 15 | Washington D.C., USA | 4.50 | 126,334 | 4.10 | 1.41 | 0.28 | 3.95 | 1.72 | 6.65 | 8.85 | 96.00 | 49.00 | 5.52 |
| 16 | Los Angeles, USA | 4.50 | 126,334 | 4.10 | 1.41 | 0.28 | 2.76 | 1.93 | 7.64 | 8.92 | 96.00 | 49.00 | 5.40 |
| 17 | Ljubljana, Slovenia | 2.65 | 87,770 | 3.30 | 2.53 | 0.37 | 2.24 | 2.20 | 3.15 | 3.85 | 101.00 | 75.00 | 5.38 |
| 18 | Rome, Italy | 2.65 | 77,070 | 6.30 | 3.07 | 0.55 | 2.58 | 2.64 | 3.09 | 2.67 | 12.00 | 10.00 | 5.37 |
| 19 | Budapest, Hungary | 6.50 | 50,003 | 4.30 | 2.61 | 0.16 | 1.93 | 1.89 | 2.46 | 4.07 | 209.00 | 101.00 | 5.30 |
| 20 | Wellington, New Zealand | 3.75 | 91,613 | 5.10 | 2.49 | 0.30 | 3.66 | 2.72 | 3.06 | 5.32 | 71.00 | 35.00 | 5.26 |
| 21 | Berlin, Germany | 2.65 | 103,633 | 3.50 | 2.88 | 0.63 | 6.02 | 2.02 | 3.08 | 6.26 | 45.00 | 16.00 | 5.22 |
| 22 | Jerusalem, Israel | 4.50 | 80,364 | 2.60 | 3.20 | 0.27 | 2.58 | 3.15 | 4.03 | 6.54 | 61.00 | 24.00 | 5.17 |
| 23 | Paris, France | 2.65 | 93,173 | 7.30 | 2.89 | 0.48 | 4.30 | 2.25 | 3.26 | 6.62 | 26.00 | 8.00 | 4.98 |
| 24 | Toronto, Canada | 2.75 | 104,408 | 6.60 | 1.92 | 0.18 | 3.69 | 4.41 | 4.18 | 6.03 | 77.00 | 34.00 | 4.92 |
| 25 | Athens, Greece | 2.65 | 47,681 | 8.70 | 3.02 | 0.33 | 2.06 | 2.75 | 2.06 | 6.23 | 64.00 | 9.00 | 4.85 |
| 26 | Lisbon, Portugal | 2.65 | 59,132 | 6.20 | 2.90 | 0.39 | 3.44 | 1.65 | 2.56 | 4.16 | 127.00 | 33.00 | 4.84 |
| 27 | New York, USA | 4.50 | 126,334 | 4.10 | 1.41 | 0.28 | 4.58 | 2.43 | 7.84 | 9.37 | 96.00 | 49.00 | 4.77 |
| Riga, Latvia | 2.65 | 61,088 | 6.90 | 2.65 | 0.42 | 2.58 | 2.06 | 2.51 | 5.34 | 99.00 | 25.00 | ||
| 28 | Helsinki, Finland | 2.65 | 91,238 | 8.90 | 2.96 | 0.28 | 5.16 | 2.08 | 4.44 | 7.48 | 1.00 | 18.00 | 4.69 |
| 29 | Oslo, Norway | 4.50 | 113,491 | 3.70 | 3.06 | 0.24 | 6.25 | 3.42 | 5.27 | 7.41 | 44.00 | 25.00 | 4.53 |
| 30 | Vilnius, Lithuania | 2.65 | 77,054 | 6.60 | 2.51 | 0.41 | 1.59 | 2.26 | 2.33 | 5.41 | 135.00 | 76.00 | 4.52 |
| 31 | Brussels, Belgium | 2.65 | 115,437 | 5.80 | 2.63 | 0.59 | 4.30 | 2.46 | 4.38 | 6.85 | 40.00 | 28.00 | 4.46 |
| 32 | San José, Costa Rica | 4.00 | 57,525 | 7.00 | 2.15 | 0.28 | 1.58 | 3.09 | 4.13 | 6.29 | N/A | 21.00 | 4.39 |
| 33 | Amsterdam, Netherlands | 2.65 | 110,675 | 3.80 | 3.29 | 0.41 | 5.85 | 2.18 | 3.45 | 6.94 | 100.00 | 26.00 | 4.23 |
| 34 | Stockholm, Sweden | 2.25 | 91,452 | 9.70 | 2.48 | 0.34 | 6.72 | 2.53 | 4.93 | 7.51 | 32.00 | 23.00 | 4.12 |
| 35 | Vienna, Austria | 2.65 | 112,222 | 5.50 | 2.56 | 0.49 | 4.13 | 2.54 | 4.29 | 7.23 | 63.00 | 44.00 | 4.09 |
| 36 | Bern, Switzerland | 0.50 | 131,407 | 4.50 | 3.10 | 0.61 | 5.40 | 3.23 | 4.40 | 8.77 | 38.00 | 12.00 | 4.08 |
| 37 | Tallinn, Estonia | 2.65 | 58,981 | 7.60 | 2.70 | 0.43 | 3.44 | 1.83 | 2.15 | 6.23 | 112.00 | 66.00 | 4.06 |
| 38 | London, UK | 4.50 | 90,856 | 4.20 | 2.82 | 0.56 | 5.94 | 2.60 | 3.14 | 7.64 | 44.00 | 30.00 | 3.88 |
| 39 | Dublin, Ireland | 2.65 | 89,581 | 4.00 | 3.08 | 0.59 | 3.44 | 2.38 | 3.24 | 6.92 | 83.00 | 70.00 | 3.87 |
| 40 | Reykjavík, Iceland | 8.00 | 137,853 | 3.60 | 3.69 | 0.27 | 7.67 | 2.73 | 6.15 | 8.92 | 150.00 | 68.00 | 3.25 |
| 41 | Copenhagen, Denmark | 2.10 | 109,632 | 6.80 | 3.34 | 0.52 | 5.66 | 3.24 | 5.99 | 9.98 | 42.00 | 16.00 | 3.17 |
Prices listed are in AUD. Where publicly available data was unavailable (as indicated by N/A), a score of zero was given for the particular data points.
Other key national-level findings include:
Compare the Market’s General Manager of Money, Stephen Zeller, said that while no city is ‘perfect’ when it comes to cost-of-living, there are ways to reduce household money pressures.
“While Seoul, Brisbane and Madrid ranked at the top of our updated index, no city received a score higher than seven out of 10 – demonstrating that no place is entirely perfect for those seeking cost-of-living relief,” Mr Zeller said.
“However, there are ways to reduce cost-of-living pressures to ensure you’re not paying a cent more than you need to on everyday bills.
“Whether it’s your home loan, energy plan or insurances, shop around and compare what’s on offer.
“If your home loan is taking a larger-than-ideal portion off your payslip, it’s worth comparing what’s on offer from lenders, look for a better deal, and switch to help ease one major cost-of-living pressure.”
Using 42 different capital cities across 37 economically developed countries globally, we indexed 11 different cost-of-living factors using the latest-available data in March 2025.
Each factor was indexed relative to each country with equal weighting, then averaged to produce an overall index score out of 10. A higher score represents better cost-of-living.