21 Mar
The cost of living is on the lips of just about everyone at the moment, so new research from McCrindle on Australia’s income and wealth distribution caught my eye.
This research reveals that the average full-time earnings is $97,510, with household gross annual income at $121,108. But the question is with these higher income levels, are we any better off? The Australian Bureau of Statistics says that to answer that question, both income and wealth need to be considered.
I’m sure it’s no surprise to anyone that older boomers (65-74 years) and younger boomers (55-64 years) have a net worth above the national average, even though their incomes are below national averages. Together they hold 49% of the country’s national wealth. This cohort is at a stage of their life where they can draw on wealth accumulated over time to ride out a rise in the cost of living.
By comparison, Gen Y represents 15% of the population but only holds 5% of the nation’s wealth, making them more susceptible to financial strain during the current cost of living crisis.
The gap between the rich and poor also continues to widen. The top 20% of households are earning 48% of all income, and the bottom 20% are earning only 4% of all income.
Another debate we often hear is that ‘boomers did it tough in their day too’. There is no question that most boomers did work hard for their money, however, we need to apply some context. While earnings have risen on average by 5.9x since 1981, the median house price across Australia is now 10.3x the average earnings. This puts the dream of homeownership for younger or low-income Australians even further out of reach.
Unfortunately, there is no silver bullet to help ease the cost of living or make housing more affordable. I’d like to see governments implement plans to further support young people and those on low incomes so they can navigate this tough time. In the meantime, we need to remind ourselves of the stress people in some parts of the community are feeling and do what we can to support them.
Until next time, stay connected.
Sadhana Smiles
CEO, Real Estate Industry Partners
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