The quarterly MLC Wealth Sentiment Survey has been released this morning and it contains both a message for the future and explanation of the current situation within the Australian economy, where consumers are cautious and continue to pay down debt as opposed to spending.
The survey shows that “nearly half of Australians are undecided on whether they will have to sell the family home to fund their retirement.” It also finds that “more than half of those surveyed believe they won’t have enough or far from enough to retire.”
That’s pretty scary for those who are goosing property prices around the country at the moment as the survey suggests the potential for a wave of demographic selling at some point in the future.
“Australians are looking to rely on the family home to help fund their retirement and cut back spending on their children and home to make their savings last,” NAB Wealth Group Executive Andrew Hagger said.
From a behavioural economics point of view that is all you need to know about why the domestic economy is failing to make the transition away from the mining boom to more balanced growth.
It also highlights why the RBA’s much desired ‘animal spirits’ are lacking in the economy.
Australians, worried about their future, are saving for it and forgoing current consumption now.