Is it expensive to live in Sydney?

A long time friend of mine recently asked me if living in Sydney is expensive. For all you aspiring immigrants (I never know if its emmi or immi) you will be glad to know that the short answer is “Yes”. But yes of course depends on a whole bunch of things and is not necessarily a bad thing.

I can only speak in comparison terms about Sydney and Johannesburg. I lived in Johannesburg for most of my adult life and as such it is the only frame of reference that I have. I guess other cities in South Africa would be reasonably comparable to Johannesburg. For the most part if you are from South Africa and your intent is to settle in Sydney and keep as close to your “native” (I use the word loosely) lifestyle then you will find it an expensive place to live.

The biggest culprit is clearly going to be putting a roof over your family’s head. Whether it’s to rent or to buy (depending on your visa situation), both are expensive. As you look at different suburbs while looking for a place to stay you will notice is that with a few minor exceptions there is much less of a difference between the good suburbs and the not so good suburbs. In Johannesburg if you lived in say Bedfordview you could pretty much count on a certain value and standard of housing in the area. The same could be said for Orange Grove, Melrose, Rivonia, Vorna Valley or any other suburb. Here in Sydney although there are some differences between certain areas, you can find a really great and expensive house right next to a pretty average dilapidated clapboard house from the 50’s. People don’t seem to mind.

We chose to stay near the sea and the beach. Having lived away from the coast for more than twenty years we (read “I”) decided that we did not want to live an hour from the beach. This was a significant lifestyle choice as we did not want going to the beach to be a chore and something that quickly faded into the distance. It also meant that we needed to cough up a whole bunch more dough. A similar house further west would have saved us more than half of what we are currently paying in rent per week. For a good idea of what you can expect to pay for housing (rent or buy) have a look at http://www.realestate.com.au/. It’s a pretty good site for that information and ultimately was the tool that we used for our search. Just note that they have fantastic photographers who can make an average place look stunning on the web. We live in Newport on Sydney’s Northern Beaches. It’s probably about 30km or so from Sydney city centre. I liken it to Ballito and Durban. It’s a great area to live.

Depending on the visa that you are coming across on, you may be saddled with unexpected school costs. If you are a temporary resident (e.g. on a 457 visa) in New South Wales you can expect to shell out A$4,000 OR $A5,000 dollars per child per year for education fees that are paid directly to the state for schooling at a public school. This is not far off of the many Catholic schools and the Private Schooling system. These fees are only applicable in certain states where they interpret the rules about federal grants differently. So far as I know Victoria (Melbourne) and Western Australia (Perth) do not carry the same burden. The good thing to note is that these fees go away once you are a permanent resident.

Beer (a subject close to my heart), and most alcohol, is fairly pricy. I only like certain beers and I recently paid A$44 on a special for a case of my favourite tipple. Usually it can cost A$10 to A$15 more. Wine costs anything from A$10 to A$35 per bottle and spirits vary a great deal with cheap vodka coming in at A$30 all the way up to A$60. Although Australians seem to be a nation of drinkers, it is one area that can quickly add up.

Cars are relatively cheap. You can get away with a reasonable second hand car for between A$8,000 and A$12,000. German cars remain more expensive with a Golf GTI well over $A40,000. Be sure to ask your dealer for a “driveaway” price as this will include all the taxes and other on road costs which can be fairly substantial. Toyota’s, most Ford models, Holdens (really Chevys) are reasonable. Check out the http://www.carsales.com.au/ site. It works quite well. I also recommend http://www.hertzcarsales.com.au/. They sell all older hertz rental cars and they are generally in good condition and a good deal. Brian Blanford at hertz car sales in Haberfield is a good contact. Interest rates are low so monthly repayments are pretty fair.

You will generally find that anything which has a high manual labour content is expensive. It can cost A$60/A$70 a week to have someone come in an give your house nothing more than a cursory clean. Windows will be extra and don’t even think about laundry. Good thing is that most houses have dishwashers and proper laundry areas. You learn very quickly how to wash things and hang them so that they don’t need to be ironed. The tumble dryer is a boon that you cannot live without. This is one of the things that we miss most about South Africa. Domestic help is such a privilege. Cleaning house, doing laundry, washing dishes, etc. these are all a big drain on one when you are not used to them.

Food is fast becoming on par with South Africa. (Or maybe that is the other way around). We noticed that the high inflation in SA is causing food to spike. Already prices are not far off of Australia although some items are still different. Net Net we probably spend a similar amount on food here as we did in SA. One thing to note is bread. This is pound for pound one of the most ridiculously priced items. Of course there is cheap bread but it’s not really worth buying. Normal bread that most folks would buy costs around A$5 per loaf. You will find yourself going to the shop more often because the fresh stuff is much better than SA and it’s good to get it often. A regular trip to the South African shop for Boerewors, Biltong, Mrs. Balls Chutney, Crosse and Blackwell mayonnaise, Ouma Rusks etc. will set you back a fair bit. Mostly because you cannot help buying all the goodies that you have been missing. We seldom get away with a bill smaller than A$200 but its worth every penny.

Going out to eat is pricey but somehow restaurants all seem to be packed. A meal at a reasonable restaurant can be A$15 for a starter, A$30 for a main and another A$15 for dessert. With a family of five that quickly adds up. Of course Pizza Hut, Dominos, hungry jacks and the like are pretty cost effective. You can feed a whole family of five at hungry jacks for under A$40.
All in all what this means is that you need to plan properly and make sure that you budget correctly. Be mindful of the salary offer that you accept, it may catch you out later especially if you still have expenses back in your home country that you are supporting. Once good thing to note is that temporary residents (457) are eligible for a living away from home allowance (LAHFA). This is basically a tax free portion of your salary and certainly makes a difference to the bottom line as long as you have it. Do factor this in to your calculations, it can make a big difference. You can find information on the Australian Tax Office site. http://www.ato.gov.au/.

If you ask me if living in Sydney is worth the expense, I will gladly tell you that the combination of generally good weather, great beaches, clean seas, ordered friendly society, law and order make Sydney a great place to live. If most of Australia actually supported rugby union then the old Chevy singsong of braaivleis, rugby, sunny skies and Chevrolet would be a perfect description.

Thoughts on selling big ticket enterprise technology after the GFC

Clearly the financial world is a new place when compared with six months ago. If I look back it used to be predictable and ordered although this may have been an illusion. Selling big ticket enterprise technology was about seeing the right people, having the right products and being able to be competitive on the price front. There was serious competition and it was not uncommon to be bidding against a number of small companies playing in your space all vying to dethrone the king. Price became their weapon as they fought to gain footholds in markets that larger so called “less agile” companies reluctantly relinquished.

Then it hit. The Global Financial Crisis (GFC) unfolded and the game started to change. Potential customers went into hibernation as the struggled to understand what this all meant to their business. Some did not even know if they would have a business tomorrow. As the customers struggled with their dilemma, business for big ticket software started sliding. Targets became difficult to reach and many, many folks missed their numbers for the first time in many years. To some extent the predictable world that existed before the GFC made people and companies complacent. The software market was growing; there would “always” be a need for new and innovative systems and given that customers in the financial services field were making unprecedented profits their would be cash to pay for them. Bingo… are you awake now. Sounds like dotcom all over again. Reminds me of some billionaire saying there would never be a need for more than 640k memory or was that 64k. I can never remember but the lesson is the same.

So what now. If you examine the new world you can see that the appetite for risk has diminished. When I speak with customers, they indicate that their budgets have been reduced and the need to justify spend has increased. They worry about sustainability and they worry about stability. But is also clear, that they themselves cannot keep the status quo. The good times lead to excess and bloated staff numbers, inefficient processes, software and poor risk management. If there has ever been a time for business in the financial services sector to stand up and take account of themselves, this is it. Those that move swiftly to replace inefficient and aging software, streamline their operations and improve both their risk profile and cash flow will be the victors. It’s a scary proposition given the tenuous state of some business. It really is a time when fortune will favour the brave.

This is both good and bad for big ticket software vendors. Those that are large but are well run and nimble despite their size will warrant customer’s attention. They reduce the risk for customers through their diversity of earnings, products, services and geography. New world customers would rather do business with fewer low risk vendors than multiple smaller but higher risk vendors. If you are one of these and if your strategy is not well thought out and you have no way to mitigate the risk (perceived or real) of doing business with your company then you are probably going to lose out to a bigger player. It will be time to draw down on your savings accounts or find a big brother to take you under his wing. For larger companies, it is time to capitalize on this opportunity to gain more market share, become more agile.

Its going to be interesting to see how reality treats us, regardless of which way it goes.

A car for the beach

So, I have decided to buy another car. We bought a Toyota Kluger SUV when we arrived in Australia and it was been really good. It has plenty of space and grunt to boot. I know it’s not very politically correct (read: not very green) but I will merely say what I heard from a friend some time back when he asked why someone had such a big car. Its because its such a big country.

Anyway, although the public transport is great when you want to go longer distances, it is a bit tricky to pop down to the beach or down to the store when we are all busy doing different things. So despite having got by for four months with the one car, I am going to get another.

That raises a whole bunch of other questions: How much do you want to spend? What do you want to use the car for? What condition are you prepared to accept? How new should the car be? The list goes on and on.

I have settled on a small runabout in the form of a 20 year old Suzuki 4 wheel drive (the mini jeep lookalike if you know it). The ride is very rough and the finish is probably rougher still, but it will get me to the beach with the kids and the surfboards, it is light on fuel (something green at last), parts are cheap (although I wont be doing any mechanical work myself), it comes with a set of roof racks and most importantly the price is right.

Moving to a new country for us has meant that to a large extent we need to practice a new type of fiscal discipline. With only one person earning cash for now, we don’t want to overextend ourselves with more debt. For this reason, the price of the new car is most important. I want to be able to pay cash for it. I guess that gives my price range away. The next question is whether the lady who currently owns it will accept my offer.

I wanted to stress a couple of points here: 1) Try as you might it will probably be difficult to get away with one car for a big family, especially if you are used to the freedom of movement that having a car brings; 2) Sticking to a budget is pretty difficult at the best of times. When you move countries it becomes imperative to be as prudent as possible or you will quickly sink yourself. Watch that debt.

I hope that my offer is accepted, that way I can further expand my new found freedom. Its really a small price to pay.

A fresh start

It's 2009. A new year for us here as South Africans living in Australia. It took us nearly ten years from when we first considered the move. We eventually gave in and followed many others that went before us. We were fortunate enough that opportunities and cash flow aligned and made the "groot" (big) trek. I deal with many people from various corners of the globe and the question most often asked by these people is whether we are enjoying our new situation. I almost always answer with a positive spin. After all, this was a huge decision and we need to keep our heads up and make the best of what we have.
To be fair, there have been some tricky times during the last four months, but all in all we have no regrets. That's probably a sad indictment on South Africa, which was our home for nearly forty years. It was where we fell in love, were married, our children were born and where most of our family still live. Yet somehow it's been okay to leave those emotional ties behind. I guess not looking over your shoulder constantly is a relief. Whether the violence or threat of violence was real or perceived, it weighed us down and I now feel a sense of freedom that I have not felt since I was pretty young.

I wont go into too long a list but some of the good things here include:

• A public service that actually works. Try registering a new car into your name in South Africa in under 3 hours - my experience here: 15 minutes including the wait;
• Laws that are enforced - get caught on camera driving in a bus lane in Sydney will set you back $243 each time plus demerits on your license (I speak from experience); speeding, drink driving (I know grammatically not correct), driving without seat belts will each set you back a hefty fine along with demerits. Serious crime, which does happen from time to time, warrants headline news for weeks on end;
• Public transport including buses, trains and ferries that are mostly on time and are affordable. Not to mention taxi cabs that one can get on a whim although more expensive;
• Being able to walk around in the city late at night with your family including small kids with no fear.
• Beautiful, clean, well looked after beaches patrolled by dedicated life savers (most beaches)

Although we sometimes get homesick, we can get a quick fix to some extent by a visit to the local South African shop. There are a couple where you can get your favourite treats including: proper chutney, aromat, South African mayonnaise, Tex bars, Astros, Ouma rusks, cream soda and of course boerie and biltong.

Most of our friends are ex South Africans although we are slowly starting to meet and socialize with Australians. I think it is the one thing we need to be aware of: We want to integrate and want to diversify our social circles. This will take conscious effort on our part. it will be easy to keep our circles to those few South Africans that we know here. No disrespect to those guys, we love them dearly and will always keep them front and centre.

This year will be our assimilation year. We will follow the days from the start of the year to the finish through all the seasons and all the occasions along the way. We will enjoy and learn as we go; we will make friends and have adventures; we will catch some waves and some rays. We will Live our lives!