Money
The current median salary in Australia stands at around AU$88,000. Pixabay

A recent poll has shed light on the varying amounts of money Australians from different generations believe they need to feel financially comfortable.

The findings, based on a nationally representative survey by Finder.com.au, revealed significant differences between the generations, with the most striking expectations coming from Gen Z.

Across all age groups, Australians said they would need an average annual income of around AU$165,000 to live comfortably. However, the expectations of Gen Z, those born between 1997 and 2011, were notably higher, with many saying they would need nearly AU$200,000 per year, reported News.com.

This figure stands in stark contrast to Baby Boomers, who, having largely retired and paid off their mortgages, believe AU$107,000 would suffice for comfortable living.

The survey also highlighted the expectations of Millennials and Gen X, who were somewhere between the Baby Boomers and Gen Z. Millennials, born between 1981 and 1996, said they would need AU$176,000 annually, while Gen X, born between 1965 and 1980, set their required income at AU$161,000.

Based on the Australian Bureau of Statistics (ABS) data, the current median salary in Australia stands at around AU$88,000.

High expectations

Sarah Megginson, a personal finance expert at Finder.com.au, offered insights into the reasons behind Gen Z's higher financial expectations. She suggested that this generation's money demands were influenced by their broader spending options and the rise in property prices.

Megginson pointed out that Gen Z's expectations were less about their current financial situation and more about their aspirations for the future. For many young Australians, owning a home seems like an unattainable dream unless they can significantly increase their income. The rising costs of property across the country have made it even harder for younger people to feel confident about homeownership.

"Gen Z, because of their age, are less likely to have mortgages, own property or have kids. But in the last five years, housing prices have gone from unaffordable to astronomical," Megginson said.

Realities of homeownership

According to Megginson, Gen X and Millennials' income expectations were more in line with what was needed to afford housing in most capital cities.

For example, a person looking to buy an apartment in a capital city at the median price would need to earn around AU$136,000 annually, assuming they had a 20% deposit and the current loan rate of 6.23%.

In Melbourne, someone purchasing a house at the median price would need an income of approximately AU$183,000, while in Adelaide and Perth, the required income would be around AU$170,000.

However, Sydney stands out as the most expensive city, with an income of AU$292,000 required to afford the average house.

Struggles of the younger generations

Megginson emphasized the challenges facing younger generations, particularly when it came to the housing market. Many were looking at the prospect of saving for a six-figure deposit and taking on a mortgage approaching a million dollars, just to secure a small starter home in one of Australia's capital cities.

With these realities in mind, it's understandable why many in Gen Z, and even Gen X and Millennials, feel they need a higher income to be financially secure.

"It's understandable that they might look at this and think: to be financially comfortable and afford to own a home, I'm going to need a lot more money," Megginson pointed out.