Australians are becoming increasingly wary about the nation’s housing market with a huge drop in people prepared to say real estate is a good way to save.
Today’s monthly Westpac-Melbourne Institute measure of consumer sentiment showed virtually no change in consumer confidence this month, with pessimists narrowly out-numbering optimists.
But it did find a major shift in attitudes on saving.
Just 11.6 per cent of those surveyed favoured real estate as the best way to save. It was the lowest result to a question that has been asked by Westpac since 1974.
Westpac chief economist Bill Evans said the result highlighted a key issue among Australians.
“The moves indicate a clear increase in risk aversion,” he said.
While worried about bricks and mortar, there was a jump in the number of people who believe “paying down debt” is the best way to save. More than one in four of those quizzed backed this as their saving option
A separate question about housing prices showed a lift in the number of people who think prices are continuing to climb.
The issue over housing and real estate follows warnings from the Reserve Bank about the sharp rise in prices hitting Sydney and Melbourne.
The bank’s assistant governor for financial services, Michele Bullock, told a conference yesterday that there were signs of over-supply in Brisbane and parts of Melbourne already.
A sharp drop in prices would be a “systemic issue” for the entire financial system.