There’s a growing pessimism about the state of housing affordability and living costs more than any other lifestyle factor over the next 10 years, a new report from National Australia Bank (NAB) shows. The report – entitled Life in the “Lucky Country” – What makes Australia great? – also revealed that the rising cost of housing in the capital cities is eroding business confidence and consumer spending in these areas.
After surveying 2,300 people and 50 businesses, NAB found that 88% of respondents agreed that Australia was a “great place to live in” this year. In contrast, the outlook for the coming decade was less positive. Telecommunications, public transport, and entertainment were the only lifestyle areas expected to improve by 2027, out of the 26 measured areas.
Pessimism about the future was also apparent in the business sector.
While the majority (80%) of business owners surveyed said Australia was a great place to do business in this year, only six out of 10 thought the same would hold true in 2027.
Rising house prices in the capital cities could be one of the reasons why entrepreneurs are so pessimistic about the future, said Alan Oster, chief economist at NAB.
“It’s hard to explain why, but my guess is that in the city where there are much higher house prices [people] are less inclined to spend on discretionary things and more inclined to put the money into their mortgage,” Oster said.
Despite this, NAB’s report found that those living in rural towns and the bush expected “most factors making Australia a great place to live now to deteriorate much more than those living in regional and capital cities.”
“Australians identified access to social welfare, living costs, tax levels, jobs and housing affordability as the key factors they expect will deteriorate the most in the next 10 years,” Oster said. “Consumers are saying they expect very little progress in the areas already holding Australia back now.”
