About 80% of Australian households own their home or have a mortgage, according to the latest report from ING DIRECT.
Data from the ING DIRECT Melbourne Institute Household Saving & Investment Report reveals that putting money into property has become a major priority for Australians.
In the quarter to June 2007 around 47.6% of those surveyed fully-owned their own home and 32.4% had a mortgage. This is a significant rise from the same time last year when only 39.9% fully-owned their own home.
The report states: "Some 16.3% of households indicated in the June quarter that they would use hypothetical new savings to pay off the home mortgage, suggesting a desire to reduce mortgage debt and servicing costs in an environment of high interest rates and soft house prices."
Figures show that paying off the home mortgage was the most popular use of savings during the past year, ahead of the traditional savings account. Around 19.6% of respondents to the ING DIRECT survey used new savings to pay off the mortgage in the quarter to June 2006 and 16.3% in the quarter to June 2007. This compares to 15.7% who would put money into a savings account.
Putting money towards an investment property was also very popular, with 16.7% of respondents considering this as the best use for new savings in the quarter to March 2007. This was far more popular than other forms of investment such as shares (8.6%), superannuation contributions (7%) or paying off other debts and bills (4.4%).
Mortgages are still the most prevalent form of debt, according to the survey with 32.4% of households stating this as their biggest debt, closely followed by credit card debt at 31.2% and bank loans at 17.8%.
The focus on paying off mortgage debts could be due to speculation about interest rates according to ING DIRECT spokesman Michael Smolders.
He said: "Nationally, one in four families cite repaying debts as a reason for saving, up from 17% just three months ago. The speculation about interest rate hikes could be fuelling this focus. People tend to pay a lot more attention to their mortgage, credit card and bank balance in this climate."
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