Most Aussies don’t think an average salary is enough to live on.
Soaring housing and rent costs have shattered long-held ideals of what constitutes a “good salary” and workers’ perceptions are almost unrecognisable from a few years ago, new surveying shows.
Comparison group Finder recently ran a poll asking Aussies to reveal what income they believed marked the start of a decent pay package, revealing the typical $90,000 a year wage is not even close.
The survey of 1,003 respondents across the country revealed the average Australian viewed an income of about $140,000 as the start of a “good” pre-tax base salary, excluding super contributions and benefits.
It’s likely these expectations have been influenced by the recent explosion in the cost of living, especially from home prices and rents.
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Soaring home prices and rents mean people need a lot more money to feel well off – particularly in Sydney. Picture: Gaye Gerard
It comes as PropTrack data showed national home prices have climbed by an average of nearly $90,000 in the past year alone, with prices in Perth, Brisbane and Adelaide soon to be double what they were only five years ago.
Finder’s research revealed a correlation between the cities with higher housing costs and higher expectations of what marked a “good salary”.
The average resident in Queensland, one of the fastest growing housing markets, considers $128,669 a “good” salary.
This expectation rises to $150,371 for residents of NSW, where housing and rent costs are by far the highest in the country.
The average Aussie in WA considers $142,145 a good salary, compared to $136,630 for SA residents, and $135,159 for those in Victoria.
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Finder’s head of consumer research Graham Cooke.
The average full-time worker earns just over $104,000 per year, but the median salary for full time workers is just over $90,000, according to the ABS.
Finder head of consumer research Graham Cooke said it wasn’t long ago that a six-figure salary used to come with bragging rights.
“These days, with higher living costs and property prices defying cost of living pressures, many Australians see a higher level of income as the baseline rather than a luxury,” he said.
“What counts as a ‘good’ salary will always come down to personal factors, namely where you live, whether you have dependants, and the kind of lifestyle you’re aiming for.
“For the average household, $139,000 represents comfort and breathing room. Others, particularly in major cities, feel like it barely covers the essentials.”
Women reported higher expectations of what qualifies as a good salary ($142,338) than men ($136,820), according to the polling.
Personal finance expert Sarah Megginson said Aussies were a lot more wary of bank charges given the higher cost of living. Picture: Michelle Swan.
Mr Cooke said earning a decent income wasn’t only about numbers.
“The environment you work in and your relationship with your boss can be as important as salary,” he said.
“Regardless of your wage, there are practical ways to improve your financial position.
“If your pay isn’t delivering the lifestyle you expected, it may be time to reassess your expectations – and your spending.”
Separate Finder research showed high living costs had created a climate where people were scrutinising their bank account policies more to maximise every cent of interest.
Respondents were asked about the three most important factors when choosing a savings account.
Nearly two thirds said no account fees was their top priority while 61 per cent ranked the interest rate itself as the top consideration.
Flexibility – such as being able to withdraw or transfer money easily – came in third at 40 per cent, ahead of an easy to use banking app (30 per cent), and the brand of the bank (30 per cent).
The findings come after the Reserve Bank of Australia recently increased the cash rate to 3.85 per cent, prompting banks to begin lifting interest paid on savings accounts.
While mortgage holders brace for higher repayments, savers are finally seeing some relief as competition for deposits heats up.
Sarah Megginson, personal finance expert, said Australians are taking a far more hard-nosed approach to where they park their cash.
“In an era of cost-of-living pressure, savers are unwilling to tolerate fees that erode their returns,” she said. “People have worked too hard for their money to watch it get chipped away by unnecessary charges.”
Ms Megginson said brand power appears to be waning.
“Australians are becoming far more rate-conscious and they’ll move their money if the numbers stack up.
“Even a small lift in your interest rate can translate into hundreds of dollars extra over a year.”
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