Australian households pre-occupation with saving their income rather than taking on mortgage and other debt has increased, third quarter GDP figures released today by the ABS show.
The household savings ratio has increased from 9.2% in the June quarter to 10.6% in the September quarter – the highest it has been since June 2009.
Economist Glen Maguire, a former economic advisor in the department of the prime minister, tweeted that “no wonder Australian monetary policy is a dulled instrument”.
The increasing propensity among Australian households to save re-affirms the view expressed by Laing+Simmons general manager, Leanne Pilkington yesterday, that RBA rate cuts are no longer having an impact on the housing market.
In seasonally-adjusted volume terms, the economy grew by 0.5% over the September quarter.