How has the pandemic induced recession affected you?
Clearly many people and many businesses have, and still are, suffering.
But at the same time more Australians have stashed more of their cash in the banks.
They have rapidly amassed close to $100billion in total savings as a buffer against the COVID-19 recession.
Household deposits with financial institutions it up almost 12% over the year.
In September alone $16.5billion flowed into bank deposit accounts and since the pandemic household deposits are up a cumulative $99.5bn (or 10.1% on Feb 2020 levels ).
Sure interest rates may be at record lows, and tipped to go lower, but it seems that Aussies don't want to borrow unless it's to buy a home.
The rise in the last month was partly driven by tax refunds, but notwithstanding households deposits are up $115.2billion on the same period last year.
Driving the increase in savings has been increased government payments, superannuation withdrawals worth some $34.5billion to date, and repayment deferrals, which have offset the hit to household incomes in aggregate.
That puts us in a great position as we move forward
The key implication here is that if unemployment continues to rise as government support is tapered, the household sector has a fair degree of liquidity that could then underpin consumption even as that support is tapered.
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NAB reports that credit growth (new loans) is rising - up 0.1% this month as owner-occupier housing credit starts lifting (housing +0.4% m/m with owner-occupier +0.5% m/m)
But investor lending is subdued (+0.1% m/m), as is business credit (-0.3% m/m and its fifth consecutive month of decline.)
Mortgage Stress at near record low
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