The song is about a man's long-standing unrequited and unadmitted love toward Alice, his next door neighbour of 24 years. The protagonist learned through mutual friend Sally that Alice is moving away, and begins to reflect on childhood memories and his friendship with Alice, and becomes heartbroken as he sees Alice drive away in a limousine. In the final verse, Sally reveals that all the time she has been waiting 24 years for her opportunity with him ("Alice is gone, but I'm still here").
In 1985, Australian comedian Kevin Bloody Wilson released "Living Next Door to Alan", a parody of "Living Next Door to Alice" imagining an Aboriginal family living next door to Alan Bond, a famous Australian entrepreneur.[74]
I was at karaoke the other night, and a man decided to sing Living Next Door to Alice, which is one of my favourite songs. However after each time he would sing "not living next door to Alice" the crowd would immediately erupt into a chant of "Alice, Alice, who the fuck is Alice?" which I have never heard before. It ruined the song a little bit.
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