Fewer than one-third (28%) of Australians feel optimistic about their financial future as they face ongoing cost-of-living challenges, according to Canstar’s eighth annual Consumer Pulse Report.
While this reflects a slight improvement from last year, where 76% reported no relief, the outlook remains bleak for most.
The Canstar report, which surveyed 2,003 Australian adults, highlighted a range of financial pressures, including mounting debt, rising housing costs, and growing grocery expenses.
Optimism is higher among men (35%) and younger generations, with 31% of Gen Z and 33% of Millennials expressing confidence compared to just 22% of Gen X and 25% of Baby Boomers.
“Australians are resilient, but with just 28% optimistic about their financial situation in 2025, it’s evident that economic conditions are taking their toll,” said Canstar.com.au Data Insights Director Sally Tindall (pictured above).
Housing costs, driven by mortgage repayments and rent, emerged as the top financial concern for 2025, with 25% of Australians identifying it as their biggest worry.
Millennials are hit hardest by rising interest rates, while Gen Z renters report steep rent hikes, averaging $230 per month.
Other key financial worries include:
“Housing costs have become the number one financial concern for Australians in 2025...,” Tindall said. “Whether it’s skyrocketing mortgage repayments or surging rents, it’s clear that housing affordability is stretching household budgets to their limits.”
Debt remains a significant burden, with 37% of Australians anticipating struggles to pay at least one bill or loan in 2025. Personal debt (excluding property loans) has climbed to an average of $15,179, a sharp rise from last year. Gen Z holds the highest average debt at $23,888, driven largely by HECS-FEE HELP loans.
Credit cards remain the most common form of debt, impacting 49% of Australians. Encouragingly, 76% of those with debt plan to pay it down in 2025, though 14% say they cannot prioritize repayments due to essential living costs.
Homeowners are urged to act, with Tindall emphasising that refinancing can deliver significant savings.
“Switching lenders or negotiating a lower rate with your existing bank is one of the easiest ways to reduce mortgage repayment costs,” she said.
For example, moving from an interest rate above 7% to a competitive rate below 6% on a $600,000 loan could save more than $380 per month, helping households manage soaring expenses.
Meanwhile, 44% of current homeowners are open to purchasing investment properties in the next two years, driven by expectations of lower interest rates and reduced living costs.
“If you haven’t refinanced since the start of the rate hikes, it’s time to ask yourself why?” Tindall said.
By reassessing housing costs, shopping around for better deals on essentials, and prioritising financial strategies, Australians may find some relief in the year ahead.
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