Household savings towards property rose to 25.9% during the September quarter, according to the St. George-Melbourne Institute Household Financial Conditions Report.

The climb was a record figure since the index began in March 2001.

The report also noted the popularity of deposits has declined over the year to September 2015, likely due to the record low interest rates that continue to persist.

Neelam Tandon, St. George Bank head of retail, said that there is an “ongoing tug of war” among Australian households when choosing between deposits and real estate. He noted that lately real estate is coming out on top.

“When households were asked how they would invest any potential new savings, 28.2% of respondents said they would direct these towards real estate compared to 27.0% of households who preferred bank deposits,” he added.

Tandon commented that the results suggest a likely increase in “everyday mum and dad investors” seeking opportunities in today’s favourable financial climate.

“It also signals that Aussie households could be looking at investing, or directing to super rather than a mortgage, given households who are saving to buy or put a deposit on a house fell 2.1 percentage points to 13.8% over the quarter,” he observed.

“At the same time, saving to renovate or improve a home rose 1.4 percentage points to 38.5%, which could also signal increasing housing prices driving homeowners to renovate rather than relocate.”

Overall, Australia’s household financial conditions index declined slightly in the September quarter, but still remain 4.4% higher than the previous year’s index.

The improvement over the year could be the outcome by a surge in job growth and the decline in mortgage rates earlier this year, said chief economist for St. George Bank Hans Kunnen.

“Those in the 25-64 age group saw the greatest improvement in financial conditions during the September quarter - likely to be positively affected by recent job creation and again lower mortgage rates,” Kunnen said.

“We also saw a strong rise in the financial condition of those at lower income levels during the September quarter – this may be a reflection of solid growth in part-time employment.”

Kunnen also pointed out that there was a decline in the number of respondents that reported that they held credit card debt, both over the quarter and the year. He suggested that these respondents used cash more often to pay for goods and services, or focused on paying their debts.