It could be a merry Christmas season this year for many Aussie homeowners, who are better off now than they have been for years due largely to lower interest rates, a new report suggests.
The September St.George-Melbourne Institute Household Financial Conditions Report reveals that Australian homeowners are experiencing the longest run of improvement in financial conditions since December 2009.
The St.George-Melbourne Institute Household Financial Conditions Index has increased by 1.1 per cent in September to 127.1, representing the third straight increase and the longest run of improvements.
St.George Retail Banking General Manager Andy Fell remarked that the current economy favours homeowners, with record-low interest rates helping people lower their debt and increase their quality of life with discretionary spending.
“The low interest rates we’ve seen in the past couple of years have helped homeowners to lower their debt quicker and get themselves into a better financial position”, Mr Fell said.
“More than 40 per cent of our customers at St.George are now ahead on their loan repayments and are on the way to owning their home sooner.”
He added that with extra money in the savings accounts of Australia’s homeowners, more than a third (34.1 per cent) are now motivated to save further for home improvements and renovations, an increase of 2.2 percentage points compared to June.
There is also a decrease in the amount of households saving for a rainy day or to repay debt, signalling that people are becoming a little less cautious and more open to discretionary spending.
“With many Australians in a better position to save more, we will likely see a modest improvement in discretionary spending, especially in the lead up to Christmas with more than a third (36.7 per cent) of households listing the festive season as motivation to save,” Mr Fell concluded.