An increasing number of Australian households reported being debt-free, or at least in a steady financial position halfway through 2013, according to a new report released this week.
The June St. George-Melbourne Institute Household Financial Conditions Report showed that 82.0 per cent of households indicated they were in stable financial position, with 43.6 per cent managing to put savings away.
More have found themselves able to pay off their mortgages completely, with 42.0 per cent of households now indicating they were debt free (up from 40.0 per cent recorded in March).
The St. George-Melbourne Institute Household Financial Conditions Index lifted modestly since March, with a 1.1 per cent improvement in conditions, mirroring the below-trend growth of the national economy.
Chief Economist at St. George, Hans Kunnen commented that employment conditions have been improving in the part-time and casual sectors, which favour the 18-24 year old age group, and as a result, their conditions have jumped 13.9 per cent since March.
“An improvement of 5.0 per cent in conditions for women has also been achieved, likely due to mothers of young children making up a portion of the part-time workforce”, Kunnen added.
In a surprising development, tenants saw the greatest improvement in their financial conditions, with a 12.9 per cent increase since March.
Despite lower mortgage rates, mortgagees experienced a decline of 10.8 per cent in their financial conditions; however, fewer households held mortgage debt, with this category declining to 36.6 per cent from 38.8 per cent over the quarter.
The majority of states also experienced increased outright home ownership, suggesting greater ability to pay off mortgages entirely.