Home ownership is the largest factor underpinning financial wellness

According to its 2024 Insights report, which interviewed 5,000 users of their service about their financial wellness and literacy, up to 75 per cent of people are worried about meeting monthly expenses with more than 50 per cent also reporting significant or overwhelming stress in relation to their finances.

The financial burden of debt is negatively impacted financial wellness, the report found, with those with no debt scoring 7.3 on the wellness compared to those struggling to repay a loan scoring 3.4.

However, the type of loan appears to be a factor behind financial stress, according to YFW. YFW stated those with personal loan debt and credit card debt had higher levels of stress than those with a mortgage.

Of those who had financial stress relating to debt, 45 per cent had a personal loan compared to only 22 per cent having a mortgage-related debt.

Similarly, on a scale of one to 10, the average financial wellness score of a renter was just 5.3 compared to 7.7 for those who own their home outright. And 46 per cent of renters reported financial stress compared to 7 per cent of those who outright owned their homes.

The report found that buying a home was the biggest goal for 28 per cent of respondents (this goal was most common for those aged 20–34 years old). However, the report also said that, of these respondents, only 22 per cent had enough savings to afford a deposit (based on a home valued at $780,000).

For those who indicated that buying a home was a priority, more than 30 per cent reported being financially stressed.

Of those who said they had already purchased a home and were repaying their mortgage as a priority, less than 25 per cent of respondents reported financial stress.

YFW chief executive Alex Hassall said: “Our analysis also shows the current focus of all levels of government on both housing affordability and availability is the right one. The great Australian dream of home ownership is the single most important socioeconomic factor underpinning financial wellness.

“Owning a home outright results in the highest average wellness score of any variable analysed in our report, while renting is associated with a significantly higher level of financial stress. Getting the policy settings right on home ownership will have a huge impact on longer-term financial wellbeing.”

The report said: “[The data] makes a compelling case for policymakers and financial institutions to emphasise the benefits of home ownership – it is a goal that if fulfilled is most likely to lead to financial wellness.”