Are Aussie Household Deposits taking a plunge?

As per the latest finding of the Australian Prudential Regulation Authority (APRA), Household deposits take a plunge by almost $11.5 Bn ending June 2024, marking the first decrease in an otherwise stellar year as far as deposits are concerned.

Some of the key reasons behind this dip:

• Year-End spending by Aussie Households
• Rising Cost of living
• Households taking out money from savings, transaction, and offset accounts

But all is not doom & gloom as most of the households should be able to exhibit a rebound post the tax rates cut that begun to take place in July 2024. Overall deposits have shown resilience and sustain at $1.47 trillion which is $98.59 Bn more on a YoY basis compared to the previous year.

On the other hand home loan books continued their onward and upward journey and saw an increase of $14.88 Bn in June representing a 0.7% rise. As per Ratecity, this has been one of the largest increases in percentage terms since June 2022.

CBA led the pack with a $4.15 Bn increase in the home loan books. Commonwealth Bank is followed by Macquarie Bank which exhibited a strong comeback with a 1.5% increase ending June on a MoM Basis and a significant number of 12.5% YoY.

It is pretty evident from the previous chart that the maximum share of home loan mortgages is still dominated by Investors who delivered and led with a 30.2% increase on a YoY basis followed by Owner Occupier (13.2%) and finally trailed by personal fixed term loans.

The government already announced third-stage tax rate cuts which were supposed to roll out in July 2024, these will infuse further liquidity in the households not only ensuring their financial health remains intact but at the same time keeping the overall sentiments of the market positive as well.?

Navigating these challenging economic times can be difficult. At Ask financials, we make it a point to craft bespoke strategies that not only meet your immediate needs but keep your financial health in perspective as well.

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