CHART: Australians dislike debt, houses and stocks at present

Australians like to invest in stocks and houses more than most other nationalities.

We also aren’t afraid to take on debt, particularly when it’s used to buy housing. So on that score it appears we don’t mind debt too.

But not at the moment. We dislike all three. Just have a look at the chart below for evidence.

Source: CBA

It’s a nifty creation from the Commonwealth Bank, based off the Westpac-MI Australian consumer sentiment report for March released today.

Westpac asked the survey respondents where was the wisest place for saving right now, and the response was overwhelming.

We want to pay down debt, and think that using savings to buy stocks and housing is not all that appetising at present.

Indeed, for all the talk about booming house prices in parts of the country, the proportion favouring real estate fell to just 11.6%, the lowest level since the survey began in 1974. Shares didn’t fare much better, coming in at just 7.3%.

On the other hand, the proportion of respondents nominating paying down debt jumped to 25.7%, up from 20.5% three months earlier. Putting money in bank deposits came in at a still-elevated 29%, another sign of investor caution.

Just 5.9% nominated spending savings as the wisest option.

We’re clearly cautious, buy why?

Gareth Aird, senior economist at the Commonwealth Bank, thinks there’s a number of factors driving it.

“We suggest two factors are behind the lift (in nominating paying down debt),” he says.

“A lot of commentary recently on the high level of household debt in Australia, particularly from the RBA and a lift in fixed mortgage rates due to the rise in longer term yields.”

He also says that suggestions from some analysts and commentators that the RBA could lift rates later this year may have been another factor.

While sentiment levels could improve, the elevated levels of risk aversion seen at present provide little confidence that the rebound in household consumption late last year will be sustained in the quarters ahead.

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