‘Record’ level of cash in term deposits as Aussies shun housing market

It’s not in a coffee tin on top of the fridge, but rate rises and market volatility have pushed Australians to stash a “record” amount of cash away.

A “record” number of Aussies are stashing their cash in safer spots as they shy away from the property as interest rate rises take their toll.

New data from the Australian Bureau of Statistics has revealed households put $50.8bn into term deposits over the September quarter – the strongest growth since December 2008.

By comparison, investment in shares and other equity rose by $12bn.

Overall, household wealth fell by $279bn over the same period after a 30-year record fall of $484bn in the June quarter.

The bureau said the changing financial position of everyday Australians reflected the financial market volatility – attributable to rising interest rates and share market conditions.

ABS head of finance and wealth statistics Katherine Keenan said the fall in overall wealth was “almost entirely” the result of a cooling housing market.

Aussies are stashing their cash in term deposits. Picture: iStock

“This fall in household wealth was almost entirely driven by the decrease in the value of residential land and dwellings, which recorded its largest decline since December 2008,” she said.

Ms Keenan said the softer fall in household wealth, compared with the previous quarter, was, in part, due to a “record” increase in Australians placing their money into term deposits.

Between June and September the cooling property market cut 2.2 per cent or $319bn from household wealth.

The median Australian house is now worth around $545,000, a fall from the record high of $574,807 reached in the first three months of the year.

Australians have increasingly turned away from property this year, with the ABS attributing a 50 per cent reduction in demand for credit to a “weakening appetite” for housing loans.

The value of new home loans fell 17.1 per cent over the past year, according to Rate City.

Rate City research director Sally Tindall said interest rate rises introduced by the Reserve Bank to curb inflation had “spooked” borrowers.

Originally published as ‘Record’ level of cash in term deposits as Aussies shun housing market