How We’re Handling Our Money

[ The University of Melbourne Voice Vol. 3, No. 2  12 May - 9 June 2008 ]

What is the financial position of Australian households, their motivation to save, and trends in their assets and debt?

What is the financial position of Australian households, their motivation to save, and trends in their assets and debt?

These questions are analysed in the latest Melbourne Institute Household Saving and Invest-ment Report from the University of Melbourne.

The report’s author, Melbourne Institute economist Professor Guay Lim, highlights the following findings:

SAVINGS

Superannuation is the second most popular form of investment asset (after savings deposits), with 64.8 per cent of households indicating that they hold this type of asset, significantly up from 54.2 per cent last quarter and 59.7 per cent a year ago.

The percentage of households nominating deposits as a way to save increased to 26 per cent in the March survey from 19.5 per cent in December 2007.

DEBT

Repaying debt was cited by 31.1 per cent of respondents as a motivation for saving – a significant increase from 19.9 per cent in the previous quarter and 17.0 per cent last year.

Mortgage debt and credit card debt remains the two most widely held forms of debt.

Western Australia has the highest proportion of respondents (82.4 per cent) with debt service under 25 per cent of household income while Victoria has the lowest proportion (68.4 per cent).

Households in New South Wales were most likely to run into debt compared with households in other states in Australia. Victorians are most likely to own their own house (45.1 per cent) but with a mortgage.

The Melbourne Institute Household Saving and Investment Report is issued quarterly. Enquiries: 03 8344 2196 or email: mbest@unimelb.edu.au