Household savings directed towards property has lifted to its highest level in almost 15 years, a new survey has revealed.
The latest St George-Melbourne Institute Household conditions index, released quarterly, reveals that Australian families wanting to put their savings behind real estate lifted to 25.9% during the September quarter, reaching the highest level since the index began in March 2001.
Conversely, while deposits are still popular, their popularity has declined over the year to September 2015.
St George Bank head of retail, Neelam Tandon, says the results show households feel more comfortable putting their savings behind real estate in a low interest rate environment.
“When households were asked how they would invest any potential new savings, 28.2% of respondents said they would direct these towards real estate compared to 27% of households who preferred bank deposits,” he said.
“The results show that there is likely an increase in ‘everyday mum and dad investors’ who see opportunities in the current financial climate.”
However, despite more households wanting to direct their savings into property, households who are saving for a home deposit fell over the quarter. According to Tandon, this may be reflective of rising house prices.
“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% over the quarter,” Tandon said.
“At the same time, saving to renovate or improve a home rose 1.4 percentage points to 38.5%, which could also signal increasing housing prices driving homeowners to renovate rather than relocate.”