Consumers view real estate as a more risky investment: Westpac

Consumers view real estate as a more risky investment: Westpac
Staff ReporterMarch 1, 2017

The Westpac Consumer Risk Aversion Index results show a shift away from investing in real estate in favour of debt reduction and deposits.

Westpac’s first Red Book in 2017 found a shift back towards increased risk aversion late last year has carried into year end with an Index reading of 38 in December in line with September and compared to 19 a year ago.

Component-wise the main shift over the year has been away from ‘real estate’ (14% vs 23%) towards deposits (29% vs 26%) and ‘repay debt’ (21 percent vs 18 percent). There was a slight dip in the proportion favouring shares, from 10 percent to 9 percent. A relatively high 6 percent reported ‘don’t know’.

Click to enlarge

The accounts showed the household savings ratio at 6.3 percent, down from 6.7 percent in Q2 and 7.2 percent a year ago. Technical changes to assumptions underlying depreciation estimates have resulted in a downward level shift in savings rate estimates over the last decade.

Both the composition of income and spending shifts and the state detail continue to point to budget constraints as the main driver of lower savings rather than an easing in risk aversion and ‘precautionary’ savings.

Declines have been led by mining states where income pressures are more of an issue with a partial offset coming from rising savings elsewhere.

Editor's Picks

Bradmill Quarter: Bringing community and amenity to life in Yarraville
Orchard Piper secures $20m record-breaking penthouse sale at One Toorak Place
UEM Sunrise kicks off registrations of interest at One Oval, new Subiaco apartment development
"One of the rarest finds on the Mornington Peninsula": Inside Hali Dromana
BLVD pursues WELL Certification as demand for healthy homes grows