Is Saving Back in Fashion?

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Presumably as a result of the recent global turmoil, Australia’s savings rate jumped to 4% of income during last year. And that is a major change from three years ago — when spending outpaced our income growth.

Savings

Savings

As we emerged from the financial scare, our savings rate peaked at 6.3% in mid-2009; and was running at around 2.3% by year’s end. Nonetheless … still well above what you saw during the past 10 years.

Recently, the RBA estimated that household wealth grew by just over 11% last year to reach around $610,000 on average. And our real disposable income grew by a respectable 3.5% as well.

Both of these are on par with the boom-time highs of 2007.

h3. For Commercial Investors …

Many consumers seem to have ignored the RB A’s recent rate rises.

Although, with overall household debt and still very high levels … you are likely to see spending ease, and this will then start to affect specialty retailers — like fashion, footwear and accessories.

However, most food outlets (such as grocers, cafes and restaurants) should continue to enjoy strong demand … driven by the nation’s love affair with TV shows like MasterChef.

It seems cooking and eating out are relatively low-cost pleasures everyone can enjoy — even when times are tough.

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