Before I arrived in Australia's second largest city, Melbourne, a friend of mine warned me that stuff down under are costly. I took his message seriously, as he has just immigrated to Australia under an investment scheme that usually targets wealthy people. Still, I was a bit shocked at how biting prices were.

As a matter of fact, Australia was ranked the most expensive country in the world for the fourth time in a row, according to a report by the Deutsche Bank released last month.

The Bank's annual world consumer price index for 2014 shows that Australia on average is 12 percent more expensive than the US, which is consistently rated as the cheapest developed country in the world.

Measured by purchasing power parity for a wide range of categories of goods and services, Australia holds a dominant position of the list in terms of cost.

For example, regular commuters in both Sydney and Melbourne have higher public transport fares than any other city in the world. A tram in Melbourne is about AU $4, or about 20 yuan. Hotel rooms in Sydney can be double the price of those in New York. 

However, that's not the full picture. What's not included in the Deutsche Bank report are the utility bills and growing housing prices.

For example, the electricity bill I received for my first month was about AU $92. That is the charge for a studio less than 40 square meters without the use of washing machines and heaters. Among the charges is the connection fee of AU $30, which is a one-time thing. But even you exclude the connection fee, electricity remains pricey.

Why is Australia so expensive?

Economists point at the fact that Australia is the only developed economy that has enjoyed a consecutive economic growth for more than 20 years.

The theory goes like this, as the economy grows year after year, inflation also rises correspondingly. Then goods grow steadily more expensive. In the absence of a serious economic slowdown, "prices have drifted higher over time," says Adam Boyton, chief economist of Deutsche Bank Australia.

Besides, there's also an inefficiency issue. Boyton told local media that "the surge in commodity prices that had underpinned our economic performance meant we really didn't have to be efficient. We could just rely on getting paid much more to do the same thing."

Labor is expensive too. A basic haircut for men costs AU $25, or about 120 yuan. But in China, that can be done for just 20 yuan or less.

For the power bill, there seem to be multiple reasons behind the coercive charges.  Some blame the privatization of the energy sector. Others point their figures at carbon taxes. But ultimately, it's the result of government policies.

A consumer survey in 2014 said Australians are struggling to cope with the high cost of living - "dipping into their savings, delaying purchases and using their credit cards to bridge the gap between pay days."

It discovered that a third of the respondents say they find it difficult to get by on their current income, and two-thirds say they have cut back spending on non-essential items.

Complaining about the public transport fares, a web user sighed, "How can catching a train in Sydney be more expensive than London? It's breathtakingly expensive there."

Winter is approaching in the southern hemisphere. A professor from a local university in Melbourne told me, if necessary, he and his wife would move to a small room where they switch on the heater.

The author is a commentator on current affairs with China Radio International. He is now a visiting scholar at the University of Melbourne. opinion@globaltimes.com.cn