Real estate has won the popularity ‘tug-of-war’ against bank deposits, according to a St. George Bank report.
The bank’s quarterly report on household financial conditions found household savings directed towards property lifted 25.9 per cent during the September quarter. This is the highest level since the index began in March 2001.
St. George Bank head of retail, Neelam Tandon said 28.2 per cent of respondents would direct potential new savings towards real estate, compared to 27 per cent who preferred bank deposits.
“The results show that there is a likely increase in ‘everyday mum and dad investors’ who see opportunities in the current financial climate,” Tandon said.
“It also signals that Aussie households could be looking at investing, or directing to super rather than a mortgage, given households who are saving to buy or put a deposit on a house fell 2.1 percentage points to 13.8 per cent over the quarter.”
Overall, the report found Australian household financial conditions declined marginally in the September quarter, but still remain up 4.4 per cent on a year earlier.
St. George Bank chief economist, Hans Kunnen said “those in the 25-64 age group saw the greatest improvement in financial conditions during the September quarter — likely to be positively affected by recent job creation and again lower mortgage rates”.
Kunnen noted there was a decline in the proportion of respondents who held credit card debt, both over the quarter and the year.
“This may indicate that cash is being used to pay for goods and services or that credit card debt has been paid off,” Kunnen said.
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