Australia remains one of the wealthiest countries in the world, with the 12th-largest economy globally, supported by its strong natural resources sector. Despite this economic strength, many Australians feel financial pressure in their daily lives.
According to AMP Deputy Chief Economist Diana Mousina, high levels of household debt are a major reason behind these concerns.
Australians carry some of the highest personal debt levels globally, mainly due to expensive housing prices and large mortgage commitments.
Household debt in Australia stands at around 210 percent of disposable income, significantly higher than in countries such as the United States, New Zealand, Canada, and Japan. Only Norway and Switzerland have higher levels of debt.
Mousina explained that Australia’s large mortgage market and strong preference for home ownership have contributed to these high debt levels. Rising interest rates and increasing living costs are placing additional pressure on families, making loan repayments more difficult.
However, she noted that Australia’s high household wealth — largely driven by property and land ownership — provides a financial safety net. Household wealth is estimated at approximately 513 percent of income, reflecting strong long-term financial stability.
Although concerns over inflation, interest rates, and recession risks have affected consumer confidence, household debt growth has slowed in recent years. Mousina believes Australia remains in a strong position due to its stable financial system, strong institutions, and solid economic foundations.
She suggested that public perception may be playing a role in economic concerns, questioning whether Australians have become accustomed to prosperity and now view financial challenges more negatively.
Meanwhile, Australia continues to perform strongly in global happiness rankings. According to the World Happiness Report, Australia ranks as the 15th happiest country in the world, ahead of nations such as the United States, Germany, France, Singapore, Italy, and Canada.
The report measures factors including economic output, freedom, welfare support, job security, and trust in institutions. Despite economic worries, Australia continues to maintain strong living standards and positive long-term prospects.