The fading mining boom has left West Australian households' financial comfort at a record low and the worst in the country, according to a new report.
Despite households in all other Australian jurisdictions feeling better about their financial situations, ME's biannual Household Financial Comfort report to December 2015 revealed WA's financial confidence had dropped to 5.1/10 – the lowest level since the survey began in 2011.
It comes as WA's unemployment rate rose to 6.6 per cent in November – its highest level in 13 years - and economists predicted Perth housing prices could fall by three to five per cent in 2016.
ME consulting economist Jeff Oughton said the extra financial pressure felt by West Australians had led to reduced spending.
"WA is being much more cautious when it comes to spending at the moment," he said.
"They're having higher levels of precautionary savings just in case they become unemployed or get sick and their loss of wealth means they've got less to spend at the supermarket and alike."
The report surveyed 1500 people and assessed their feelings about income, assets, debt, living expenses, savings and how they would cope in a financial emergency.
It showed since June 2013, WA had gone from being the most financially comfortable state in the country, to the least.
"Two-and-a-half years ago you had the lingering effects of the investment boom and now you've got production picking up across WA but commodity process are so weak," Mr Oughton said.
On a national scale the report revealed financial comfort in other state's households rising to levels between 5.5/10 in Queensland to 6.25/10 in Tasmania.
It also showed a widening gap in financial comfort between 'builder' and 'baby' boomers and Generation Y and X, with younger Australians feeling less comfort while baby boomers enjoyed the benefits of their investments and superannuation.
"Housing prices have more than doubled since 2000 while salaries and investments just haven't gone up at the same rate so for younger Australians it's really hard to get their foot on the property ladder," an ME spokesman said.
