Auckland richer - and pricier

Auckland has rocketed up from 43rd most expensive two years ago to 24th, just behind Brussels and Rome. Photo / Janna Dixon

New Zealand's rising exchange rate has made Auckland the world's 24th most expensive city in a survey by Swiss bank UBS.

Auckland has rocketed up from 43rd most expensive two years ago to 24th, just behind Brussels and Rome and dearer than several much bigger cities in the United States and Europe that have been dragged down by their plunging currencies.

But the rising kiwi dollar has also lifted Aucklanders' net wages in foreign currency terms, making Auckland also the world's 24th-richest city in terms of how much the average wage will buy.

The calculations are based on the cost of a standard shopping basket of goods in each city.

Net wages have been calculated after taxes and payroll deductions, and real wages are based on dividing average net wages by the cost of the basket of goods.

The Norwegian capital of Oslo topped the list as the world's most expensive city, but its wages were lower than some other cities so its real wages came out fractionally below Auckland's.

In real terms, UBS's home city of Zurich in Switzerland was the richest in the world with real incomes 56.7 per cent higher than in Auckland. American cities Miami, Los Angeles and New York came next in real terms despite the plunging US dollar.

The Australian dollar, which has risen even more strongly than the kiwi against the greenback and the euro, made Sydney the world's seventh most expensive city.

In real-wages terms Sydneysiders are sixth-richest in the world, just ahead of Geneva and Dublin and much richer than once powerful capitals such as Tokyo, Berlin and London.

Melbourne tourist John Boyle, 40, interviewed outside Auckland's Sky Tower yesterday, said New Zealand's cheapness was one of the reasons he chose to holiday here rather than in Sydney or Brisbane.

"Even your fruit is cheaper," he said. "We're paying $11 or $12 a kilo for bananas."

British visitor Susan Cox, who is staying with daughter Helen Ashton in Bayswater, said foods such as fruit and vegetables were better quality than in Britain so she felt she was getting "good value for our money".

But Brazilian English language students Daniel Silva, 26, and Leonardo Fastarol, 23, said they were surprised at the cost of many items here.

"The food is the most expensive, and public transport is expensive," they said.

"But clothes and electronics are cheaper than in Brazil."

UBS New Zealand senior economist Robin Clements said international comparisons were always fraught because of the difficulty of collecting the same information in each country.

"Whether we are 24th or 23rd or 25th is open to debate, but the relative position of Auckland versus Zurich is probably pretty safe," he said.

He said the fact that the survey found real wages in Auckland higher than in Norway, France, Spain and Italy, which all have higher gross domestic products per person, reflected the fact that New Zealanders on average were spending beyond their means.

"We are still running a current account deficit and it's going to get worse," he said.

But he said the survey also showed how well Australia was doing in world terms, with the world's sixth highest gross domestic product per person last year.

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