The arrival of the coronavirus this year has changed so many aspects of our everyday life here in Victoria that it’s difficult to know what “normal” might look like in the future.
One change that might surprise quite a few people, particularly given the financial challenges that so many Victorians have experienced as a result of reduced employment, is that Australians have actually increased the amount of money that they have in their savings accounts during the pandemic.
In fact, recent data from the Australian Prudential Regulation Authority shows that cash deposits held by the nation’s banks are now at their highest level on record.
The latest figures from APRA show that Australian households have put almost $119 billion into their savings accounts over the past year. The figures for October show that household savings for all banks increased by $9.6 billion to around $1.1 trillion, a figure that is believed to be “due to continued support from government stimulus and tax cuts”.
The big four banks; (the ANZ, NAB, Commonwealth and Westpac); held a record $813.3 billion in household savings at the end of October. This was an increase of 10.7 per cent, $78.8 billion over the past year, and almost all of that growth occurred during the pandemic. Interestingly, this growth has occurred at the same time as the banks have cut the interest rates they offer on their savings accounts.
Those with long memories may recall that a similar trend occurred during the Global Financial crisis, but that people immediately started spending this money as soon as they began to see the economy returning to normal. So there is a good chance that we will experience even more activity in the property market from buyers with larger deposits in coming months, particularly now that we are officially no longer in recession.
With so many different factors impacting on the property market right now, from the recent drop in interest rates to the return of Open Houses and onsite Auctions, having an experienced, independent Advocate by your side to help you buy or sell could be your greatest competitive advantage.
The team at Ian Reid are ready and able to assist you in all your property dealings, so why not give us a call on 9430 0000 today to discuss your options? You’ll also find plenty of helpful suggestions for property sellers in our free booklet, “Fatal Real Estate Traps Exposed”.