Australians are perhaps more financially stressed than ever, with anxiety over money at a level not seen in more than 10 years. According to new research, 35 percent of adults find it difficult to live on their present income. Problems Agreement that they reported being “very heavy or very heavy hearted” by as of April 2025. Even more concerning, the harmful trend is most acutely felt among low-income households. With rental costs rising and interest rates skyrocketing as well, they’re facing debilitating economic pressure from both ends.
The share of all low-income renters who were rent burdened has increased consistently. Of those who remain, their average share has grown from 52 percent in June 2021 to 57 percent in June 2023, reflecting a deepening crisis for many. Moreover, nearly one in seven low-income mortgage-holding households are behind on their payments and at risk of losing their homes. The abrupt spike in interest rates has been most painful for these households, prompting many to reevaluate their long-term financial viability.
Among those most affected by financial strain are single parents, renters, and individuals recovering from serious personal injuries or illnesses. Recent reports indicate 43 percent of these single parents are under high financial pressure. Meanwhile, 37 percent of renters and 31 percent of people with recent health emergencies are in the same boat. Australians aged 35 to 49 years come up as the most probable demographic to experience this distress.
According to social researcher Grant Dusting of McCrindle, it is crucial to look at personal situations in the context of larger economic patterns. He stated, “We’re probably in a similar position to what we were pre-COVID in terms of financial living standards and financial stress … it’s probably not as good as what people might want.” And he agreed that although recovery has come in some ways, it hasn’t been equal along demographic lines.
“It’s clear that a lot of people are doing it tough,” – Grant Dusting
It has been higher-income Australians who have benefitted from equally miraculous 3.5 percent real income growth. In sharp contrast, low-income households have experienced a miserable 0.3 percent increase. This growing disparity illustrates the deep economic chasm that has only widened in the years since.
Senior research fellow Yuvisthi Naidoo from UNSW’s Social Policy Research Centre said the increasing monetary gap between people was troubling. She remarked, “This is unacceptable in one of the wealthiest countries in the world.” Naidoo pointed out that “the steep increase in rents in recent years has had a particularly severe impact on people with the lowest incomes.”
Between June 2021 and June 2023, median advertised rent for available units more than doubled. In Sydney, it increased 40 percent. In Melbourne, it jumped 34 percent. In Brisbane, it increased by 41 percent. Rental prices have increased, forcing enormous rent burden on very low-income households. Consequently, many are confronted with difficult choices regarding their expenditures.
In the face of all these challenges though, good news continues to come with increases in real household income. Following two years of decreases, real median household income is once again on the rise. Dusting cautions against that complacency, noting that inflation is already fairly well tracked and wages are increasing. The economic reality remains that too many Americans are still feeling the pinch.
“In the last couple of years, income has come back a little bit and now it’s starting to come forward,” – Grant Dusting
Ben Phillips, an associate professor at the Australian National University’s Centre for Social Research and Methods, echoed Dusting’s sentiment by indicating that the current financial situation is not new and does not seem poised for immediate change.
In 2020, poverty rates temporarily decreased after the federal government doubled JobSeeker payments to help Australians through the COVID-19 pandemic. After that support faded and housing costs skyrocketed, poverty rates quickly spiked once more.
As young Australians between their mid-twenties and late thirties navigate these economic waters, they have made significant cuts to their spending habits in response to rising costs. These changes are indicative of an iterative approach to adapting in the face of a greater fiscal burden.
