CHART: Australians remain cautious about where and what they invest in

Australian consumer sentiment fell for a third straight month in June, according to the latest Westpac-MI survey, leaving it sitting at the lowest level since June last year.

All components within the survey relating to the economy and household finances weakened from a year earlier, underlining that Australians are feeling a little downbeat at present.

And, reflective of that view, it’s clear that Australians remain reluctant to take on too much risk when it comes to their investments.

Just take a look at the chart below from the CBA for evidence.

Source: CBA

It shows the proportion of respondents nominating the wisest place to invest new savings, with the chasm between cash deposits and paying down debt still incredibly wide compared to those suggesting real estate or stocks is the best option at present.

Risk aversion is still high, at least based off the latest survey.

According to Kristina Clifton, an economist at the Commonwealth Bank, this may reflect heightened concern surrounding the housing market.

“The proportion of consumers who believe real estate or equities is the best place for investment remains low,” she says. “This lines up with the ‘time to buy a dwelling’ index which remains close to the lows reached during the GFC.”

While that may be reflective of affordability constraints in some major Australian cities, it also suggests that concerns over a potential housing bubble — now a constant national debate — may be also keeping consumers far more cautious than what was the case before the global financial crisis.

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