Great Australian dream fading

Higher interest rates and soaring petrol and grocery prices are taking their toll on Australians, with 67 per cent of respondents to a recent survey claiming they are worse off financially than they were a year ago, up 21 per cent from November 2007.

The survey, conducted by Coredata in partnership with NEWS.com.au, found that one in five Australians are running into debt, with nearly half (47 per cent) of property investors and one-third of homeowners saying they will be forced to sell if mortgage rates rise by a further 1 per cent.

About three-quarters (76 per cent) of respondents reported finding mortgage repayments more difficult than two years ago, perhaps not surprising given the seven official interest rate rises, with one in five saying they spend more than half their total household income on home loan repayments. One in five said they were forced to take on debt to run their household.

According to the survey, the Australian dream of owning your own home and/or investment property is unlikely to become a reality for many, with two-thirds of respondents saying they are unlikely to buy or invest in residential property in the current market, up from 47 per cent last November.

NEWS.com.au business editor Nicki Bourlioufas said the survey confirms that many are struggling financially with interest rate rises and increased living costs.

“Some Australians are being forced to dip into their savings in order to get by while others are running into debt just to make ends meet.

“As expenses continue to rise, more and more borrowers are also taking on second jobs to help climb out of debt.”

Bourlioufas added that the slowing economy, likely to result in fewer jobs, could force more homeowners to sell, thereby “banishing their great Australian dream”.