Australians are reporting lower life satisfaction than they did during the height of the COVID-19 pandemic, with rising living costs and housing pressures key factors, according to new research.
A study by consulting firm KPMG, based on Australian Bureau of Statistics data, found overall life satisfaction had fallen to 7.1 out of 10 in 2025, down from 7.2 in 2020, when much of the country was under lockdown restrictions, and well below the 7.6 recorded in 2014.
The findings suggest financial stress is weighing heavily on Australians, with inflation, higher interest rates and housing costs continuing to affect household budgets.
KPMG Urban Economist Terry Rawnsley said younger Australians had experienced some of the sharpest declines in satisfaction.
People aged 25 to 34 recorded a satisfaction score of 6.8, down almost a full point from 2014.
“[This] reflects the reality of Australia’s housing market,” he said.
“This is a group facing high rents or large mortgages at the same time as real incomes have gone backwards.”
The study also found satisfaction levels had fallen below seven among Australians aged 45 to 54.
Rawnsley described this age group as the “sandwich generation”, with many balancing the financial demands of supporting children while also caring for ageing parents.
Financial pressures appear to be a key factor behind the decline in wellbeing.
ABS data showed more than one in five Australians would struggle to raise $2,000 within a week if needed, while one in four reported experiencing at least one cash flow problem during the past year.
“Unlike the pandemic lockdowns this isn’t a temporary disruption, it’s sustained pressure on living standards,” Rawnsley said.
“These factors have left many average Australians in a precarious financial position for the better part of five years and is undoubtedly affecting how they feel about their lives.”
According to the report, real wages declined by 4.1 per cent between 2019 and 2025, while household wealth has remained largely unchanged at around $700,000 over the same period.
The findings come as policymakers attempt to address cost-of-living concerns.
The Fair Work Commission recently increased the minimum wage by 4.75 per cent, while changes to housing-related tax settings announced in the federal budget are aimed at improving access to home ownership.
Not all age groups recorded a decline in wellbeing.
Australians aged 15 to 24 reported a small improvement in life satisfaction, rising from 6.9 in 2020 to 7.2 in 2025.
“There would understandably be a boost in satisfaction for younger Australians who experienced a key stage of life like school, university or entering the workforce, in lockdown,” Rawnsley said.
Despite that improvement, the report found most generations are less satisfied with life than they were a decade ago, highlighting the ongoing impact of financial pressures on Australian households.
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