Australians are doing better than ever with managing household finances writes John Carew
Things are looking good for Australians who own their own homes. The quarterly St.George-Melbourne Institute Household Financial Conditions Report showed a record
improvement in financial conditions, with September to December 2014 showing the biggest quarterly percentage rise in 20 years.
It seems the upswing in the housing market has helped improve the quality of life and financial situation for Australians who have paid off their mortgages. The rising house prices and low interest rates we’ve seen over the past years have boosted household conditions for mortgage-free homeowners and put them in a better financial position. This is an encouraging sign for those with home loans to take advantage of the current market and save more to down pay their mortgage and be closer to owning their home.
Coming out on top
The big winners were tradespersons and para-professionals (people trained to assist professionals) who recorded the biggest jump with a 21.5 per cent rise in December. The financial conditions for this group is at the highest index reading in five years and is most likely due to the rising supply of housing and the demand for construction work.
The continued trend of adding to household savings is also strong, with nearly one in two (46.8 per cent) adding to their savings account balances in December. This has increased by 3.7 percentage points compared to last quarter and is the highest proportion in one year. The downside It’s not all peaches and cream, however, as we are seeing consumer confidence continuing to remain fragile, which is reflected in the proportion of households in 2014 that intend to decrease their debt levels.
The survey shows the number of respondents who said they would pay down debt with new savings rose by 3.9 percentage points to 17.6 per cent of all households in December. This is the highest proportion in almost two years and the biggest quarterly percentage rise in three years. The findings show Australians are quite the savvy savers with just 2.2 per cent of households reporting no savings in December, which isn’t far from the historic low recorded in June last year.
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