A financial expert's assertion that Australians need to earn at least $120,000 per year to live comfortably has ignited widespread discussion across the nation, highlighting a significant divide in perceptions of financial security.
Mortgage broker Jess Phillips, managing director of Finance Emporium, stated that escalating property prices and the increasing cost of living have significantly elevated the income threshold considered 'good.' Her $120,000 benchmark is informed by her observations of clients and the rising expenses associated with housing and daily necessities.
However, Ms. Phillips emphasized that a comfortable income is subjective and heavily dependent on individual circumstances, such as marital status and whether one has children. Official figures from the Australian Bureau of Statistics indicate that the average annual salary for full-time adult employees is approximately $108,350, with the median salary around $90,532, both falling below Ms. Phillips's figure.
Ms. Phillips identified the widening gap between wage growth and house price increases as a major obstacle for prospective first-home buyers. She noted that a single individual earning $120,000, without dependents or other debts, could potentially borrow between $600,000 and $620,000 under the Federal Government's Home Guarantee Scheme. This borrowing capacity, she explained, may be sufficient for apartments or homes in regional areas but is often inadequate for purchasing median-priced homes in many major Australian cities.
Consequently, many individuals with average incomes may need to buy with a partner, compromise on property location or type, accumulate a larger deposit, or await a market downturn. Renters face similar financial pressures; research from Everybody's Home suggests a single individual needs to earn approximately $130,000 annually to afford housing without dedicating more than one-third of their income to rent.
A separate study by Finder indicates that perceptions of a 'good' salary vary based on location, age, and gender. Residents of New South Wales reported the highest expectations, suggesting a good salary starts at around $150,371, followed by Victoria ($135,159) and Queensland ($128,669). Millennials set a high bar, considering $144,138 a good salary, while women generally had higher expectations ($142,338) than men ($136,820).
Ms. Phillips's initial statement and her 'sweet spot' figure of $120,000 have prompted considerable online debate, with many Australians sharing their personal financial experiences. Some individuals on incomes exceeding $130,000 reported that they are not thriving, while others questioned the feasibility of surviving on $120,000, particularly in relation to homeownership. The discussion also raised questions about the income levels of workers in lower-paid sectors, with some commenters asking if roles like receptionists or retail workers are earning closer to $110,000.