Perth is Australia's most expensive city and one of the priciest in the world as the cost of living spirals higher.

An international breakdown of prices from bread to coffee to imported beer shows Perth is the dearest Australian capital.

And the city is more expensive than global centres such as New York and Tokyo.

The figures are based on data from the Numbeo website that collates real-time prices around the world and has the biggest collection of data of its type.

Numbeo's price index puts Perth about 7 per cent dearer than Sydney, the nation's second most expensive major capital.

Some higher costs are day-to-day purchases. Perth's average milk price at $1.63 a litre is well above the $1.47 in Sydney and $1.48 in Melbourne.

Chicken breasts, apples, local beer and oranges are all more expensive in Perth than elsewhere.

And once out of the kitchen, Perth prices really take off.

Our dearest coffee is notorious at an average $4.43 for a cappuccino in the city - the most expensive in the country and up with London ($4.40) and Tokyo ($4.13).

The situation is the same with restaurant meals.

Numbeo's analysis puts the cost of three courses for a couple in a mid-range restaurant in Perth at $100. In Sydney, Melbourne, Brisbane and Canberra the same night out is closer to $80.

Beer can be $3 more in Perth restaurants and bottled water will cost on average about 7 per cent more than in Sydney.

A pair of jeans is $20 dearer in Perth than Hobart and about $5 more than in Melbourne.

The average price for Nike shoes is more than $160 in Perth but $9 cheaper in Sydney.

Perth's only saving grace is property with rents and buying prices still lower than Sydney.

Chamber of Commerce and Industry WA chief economist John Nicolaou said Numbeo's findings confirmed Perth was a high-cost place to live and do business.

Labour was "without doubt" the main contributor but Perth's isolation meant costs such as freight and logistics were often dearer.

"WA's rapid development has put further pressure on ageing infrastructure and driven up labour costs," Mr Nicolaou said.

He suggested the Federal and State governments could ease some costs through labour ref-orms, less red tape and addressing infrastructure shortfalls.

Australian Hotels Association WA chief executive Bradley Woods said factors behind Perth costs could include isolation, the cost of transport and unnecessary regulations.

He said surveys in the food and beverage industry revealed WA profits were no higher than in the east, suggesting genuine reasons for higher prices in WA.

Mr Woods said the mining boom resulted in higher wages.

"We've got to be very mindful that we don't outprice ourselves . . . and still offer value for money," he said.

"Higher prices are a careful balancing act between viability for business operators and service providers and ensuring it's not a disincentive for people to live and visit."

Australian Retailers Association executive director Russell Zimmerman was surprised at the findings because Sydney retailers had the highest tenancy costs.

He suspected transport costs, mining boom flow-on effects and higher labour costs were behind Perth's higher prices.

Tourism Council WA chief exe-cutive Evan Hall said Consumer Price Index statistics consistently showed Perth was not the most expensive Australian city.

Curtin University cultural studies professor Jon Stratton said the perception that Perth people earned lots of money could contribute to higher prices.

The figures come as ABS data released yesterday showed Perth house prices rose another 3.5 per cent in the December quarter.

Community Housing Coalition WA chief executive Barry Doyle said this reflected an "alarming level" of inflation in the cost of WA home ownership.

The West Australia - Shane Wright and Phoebe Wearne