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More Australians saving but households still smarting from GFC

The proportion of Australians ‘saving for a rainy day’ has gone up, but the proportion of those saving for an investment property has fallen, the survey found. Flickr/Alan Cleaver

The proportion of Australians saving their pennies has risen since June, but householders still have not recovered completely from the global financial crisis that began in 2007, according to a new survey released today.

The Melbourne Institute of Applied Economic and Social Research’s quarterly Household Saving and Investment Report surveys 1200 Australian households to provide a picture of Australian saving habits.

“The household financial conditions index rose 23.3% in September to 31.1%,” said Melbourne Institute researcher, Dr Edda Claus.

“When the index rises, the proportion of people saving rises compared to people who are running into debt or drawing on savings.”

However, September’s rise followed a 24.3% fall highlighted in the equivalent survey done in June and, overall, the index is still down 1.3% on September last year.

“Household financial conditions fell during the GFC and have never really recovered. You get some variation from one survey to the next but we aren’t seeing the rebound,” said Dr Claus.

‘Saving for a holiday’ was the most nominated reason for saving but the proportion of respondents who said they were ‘saving for a rainy day’ rose in the September survey.

“That’s been trending upwards since the GFC,” said Dr Claus.

As for what Australians are doing with their savings, most are putting it in the bank or paying off a mortgage.

The percentage of households who said they would put their savings toward ‘buying investment property’ fell to 10.1% in September, the second lowest rate ever after a record low of 8.2% in November 2007.

“There are signs that house prices have moderated, building approvals have moderated and our findings are a consistent with a slowing of appatetite for housing investment,” said Dr Claus.

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