The cost-of-living crisis is forcing more West Australians to eat into their savings, with more than half indicating they’ve drawn down on savings or offset accounts to cover living expenses.
CCIWA’s Consumer Confidence survey for the March quarter found three in five (58%) West Australians had tapped into savings in the past three months, up nine percentage points from six
months ago.
The average drawdown of those who have used their savings to cover living costs is now 20%, up from 16% six months ago, and around 13% of West Australians said they have drawn down on more than half of their savings.
CCIWA Chief Economist Aaron Morey said the cost of living was the number one concern identified by households in the survey.
“It’s probably no surprise to most people that 73% of people told us the cost of living was a drag on their confidence over the past three months,” he said.
“Although concerns about interest rates have eased in the March quarter, it’s clear that the long period of successive rate rises and persistent high prices driven by inflation is continuing to impact household finances.”
The report also revealed young people are more likely to access their savings for everyday costs than older West Australians.
Two in three (66%) people aged 18 to 39 indicated they needed to use their savings accounts, compared with 57% of those aged 40 to 64 years old.
The younger cohort was also more likely to spend more of their savings, with an average drawdown of 26%, compared with just 10% for the older cohort.
But despite the increased reliance on savings to cover the rising cost of living, consumer confidence has held steady, with short-term confidence dropping by 0.4 percentage points from the December quarter, and long-term confidence increasing by 0.4 percentage points.
“WA’s strong jobs market is keeping confidence buoyant, with 35% of respondents telling us their strong employment prospects are driving a positive outlook for their personal financial situation,” Mr Morey said.
The survey also revealed flexible working arrangements ranked higher than better pay for West Australians who were looking to change jobs.
Two in five (45%) said career advancement was the main driver for considering a switch, 41% said flexible work arrangements was the key factor, while 34% identified better renumeration.
“WA is still struggling with a shortage of skilled workers so these results are an interesting insight into what workers are looking for,” Mr Morey said.
“Many WA businesses are already paying significant wages to attract and retain staff, so it’s perhaps not surprising that workers are placing a higher priority on things like flexibility and career development.”
WA’s tight housing market is also driving a shift in living arrangements, with more people willing to consider living in an apartment over a house.
“This likely reflects a combination of factors at play, including the housing shortage forcing people to reassess what they can afford and a return to the office post-pandemic driving interest in living closer to the city,” Mr Morey said.
