Morgan Tait

Morgan Tait is the NZ Herald's consumer affairs reporter.

Special report: Why we're counting the high cost of living

Paying the bills can be tough in New Zealand's biggest city, so the Herald has examined what we are payingmore for and why. From housing and groceries to iPads, we look at the stories behind the prices.

Kiwis (from left) Gemma Gastaldo-Brac, Lara Shapiro, Bridgette Walker and Emma Lines are living the London life.
Kiwis (from left) Gemma Gastaldo-Brac, Lara Shapiro, Bridgette Walker and Emma Lines are living the London life.

New Zealanders pay nearly $1 more to download Lorde's hit single Royals and 50c more for a Big Mac than fans around the world.

Apple iPads are also $150 more expensive for Kiwis buying from the Apple Store, but a one-stage bus trip in Auckland is cheaper than anywhere else - including Wellington.

Talk about the cost of living in Auckland usually revolves around house prices. As our story on A5 reveals today, it takes 19 years on a typical income to buy a typical Auckland home. But how do other prices compare?

The Herald compared what Kiwis shell out for digital music, McDonald's meals, tablet computers and a one-stage, cash-only bus ride with the going rates in Sydney, London and Vancouver.

Downloading Royals by the country's pop darling Lorde costs 92c more on Apple iTunes here, where it retails for $2.39, than what fans in Canada shell out.

Brits also get the song for a steal, paying just $1.98. However, fans across the Tasman pay $2.41 to own a copy from the Grammy-nominated artist.

Purchasing a 16GB iPad costs New Zealanders $155 more than Canadians, but not as much as consumers in the UK who pay $794.82 for Steve Job's invention, according to pricing on Apple's website.

We're also paying 54c more for a Big Mac than Londoners, 46c more than Sydney residents and just 6c less than the most expensive burger, in Vancouver.

Apple declined to comment about its pricing to the Herald, but it was understood prices were affected by differing taxes across territories.

The prices of songs were negotiated between record companies and licensed retailers, said Anthony Healey, NZ director of operations for the Australasian Performing Right Association which represents composers, lyricists and performers, and the Australasian Mechanical Copyright Owners Society.

The two groups receive 9 per cent of the price of a download here, while the record company takes 60 per cent and digital seller 30 per cent.

Mr Healey said he thought the price of music downloads here was very affordable.

Most of the cost discrepancies suffered by New Zealanders could be put down simply to our small size and isolation, said New Zealand Institute of Economic Research Principal Economist Shamubeel Eaqub.

"When it comes to things traded in international markets with a global producer, think of all the things they need to do and what they have to go through to supply a New Zealand market.

"Music is the perfect example - in New Zealand how much music could you possibly sell to just 4.2 million people versus how much you could sell in a place like Asia where the population there is exponentially larger."

Low wages and house prices were a key factor in affordability of living here, something Mr Eaqub noticed himself when he relocated from Sydney.

"The biggest difference was the income, so technically for the same job in Australia you'd get a lot more money."

Census data showed median earnings in Auckland were $29,600 compared to an average $59,943.98 in Sydney. Median house prices here were $582,000 in October compared to $791,970.23 there.

BNZ chief economist Tony Alexander also said the rising price of housing was driving costs here.

"Predominantly because of the housing costs whether you're buying and owning, so your interest charges, or whether you are renting."

However, Mr Alexander, who lives in Wellington, said employment opportunities, cultural activities and a greater likelihood of being near friends and family gave the city an edge.

"You're paying for certain things. It's just the reality of living in a large city. If people are looking for that particular lifestyle that Auckland offers, it comes down to personal choice, and we have 30-something per cent of people exercising that personal choice to live up there."

Mr Eaqub agreed: "There is an element that is unavoidable. If you want to be small we have to bear the cost of that ... but if you think about all the non-financial gains that you get living in a small place - the fact you have clean water, clean air and you can get away from the city really easily - what's the price of that?"

- NZ Herald

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