Are you thinking of applying for a home loan? Figures show that you’re one among many.
Interpreting data from the Australian Bureau of Statistics, a February 12 release by the Property Council of Australia shows that the value of home loans in the country rose by 13.2 per cent in the year to December 2015. New South Wales took the cake, recording a 31.3 per cent increase in home finance while the Australian Capital Territory followed behind with a 23.4 per cent jump.
“Owner-occupiers are seizing the opportunity from low interest rates, stronger supply and good conditions in some states,” said Property Council Chief of Housing and Policy Glenn Byres, noting that this group of borrowers has been more active in the past 12 months.
While the drive to buy properties has been sky high over the past year, have people’s spending habits adjusted in accordance with all this debt that’s been taken on? After all, saving during your mortgage journey is not just about having enough for the initial deposit.
A study conducted by Roy Morgan Research delves in to take a look at exactly what Australians are spending their money on.
The organisation’s Station of the Nation report showed that over $100 billion was spent on ‘things’ in the financial year of 2014 – 2015, which includes technology products, furniture, appliances, cosmetics and much more.
This is a 5 per cent increase over the previous financial year, which translates to around 1.1 billion of these items being purchased over an average four-week period. More than half of Aussies purchase clothes, while almost one quarter buy hardware, plants and DIY equipment over this length of time.
The report also states that shopping on the internet continues to rise in force, with online expenditure increasing by 9.7 per cent over the 2014-2015 period, translating to $37.8 billion. The fastest expanding online shopping markets were home-and-garden and electronics.
Paying with cash helps significantly for those who are trying to save. This is thanks to the psychological effect of linking the burden and cost of paying for a good with the experience of consuming or using it. As online shopping continues to rise, we might see a deterioration in savings due to its reliance on credit card usage over cold hard cash.