Cost of living pressures have been magnified by the continued fall in dwelling values, with the “wealth effect” beginning to take shape, according to new research from Mortgage Choice.
A Financial Fitness white paper, commissioned by broking franchise group Mortgage Choice and conducted by research firm CoreData, has revealed that almost 40 per cent of Australians list the rising cost of goods and services as their single greatest concern in 2019.
Reflecting on the results, Mortgage Choice CEO Susan Mitchell claimed that such concerns have been intensified by the fall in residential property prices, with the latest data from property research group CoreLogic revealing that national home values have fallen by 7.4 per cent from their peak in October 2017.
“The reality is that the wealth effect from falling property prices is weighing heavily on consumer sentiment, as people feel like their biggest asset, their home, loses value,” Ms Mitchell said.
According to the research, cost of living concerns were most prevalent among respondents in Queensland (58 per cent), followed by NSW (56 per cent), Western Australia (55 per cent) and Victoria (52 per cent).
Gender disparities were also evident in the research, with almost 60 per cent of female respondents citing the rising cost of goods and services as their primary financial concern, compared to just over 50 per cent of male respondents.
Additionally, respondents also noted that they fear they won’t be able to retire comfortably, with concerns more prevalent among men (just under 50 per cent), compared to women (43 per cent).
Ms Mitchell urged consumers to take an “active role” in the management of their individual finances.
“It is not uncommon in relationships for one person to be assigned the role of the financial decision-maker; however, this can be problematic if they have limited financial knowledge, which could ultimately hinder the financial goals of not only the couple, but the individuals,” she said.
“It is crucial individuals take an active role in their own financial wellbeing, whether they are in a relationship or are single.
“Even today, women take time off work to start a family and to care for extended family members who fall ill, which means they spend, on average, less time overall in the workforce, and as a result, retire with less superannuation. This is compounded by the gender pay gap, which is currently at 21.3 per cent among full-time employees, according to the Workplace Gender Equality Agency.”
Ms Mitchell added: “These factors combined mean women can be left financially vulnerable after the breakdown of a marriage or death of their partner if they have not taken an active role in managing their finances.
“This is why it is paramount that each individual has a strategic financial plan in place to protect their future.”