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Households deposits continue to soar plus CBA residential mortgage book falls for the 3rd consecutive month - featured image

Households deposits continue to soar plus CBA residential mortgage book falls for the 3rd consecutive month

Household savings reached a new high of nearly $1.42 trillion in September, despite increasing living expenses and 12 interest rate hikes by the RBA.

New data from APRA reveals that household deposits in banks increased by $11 billion compared to the previous month and by over $99 billion compared to the same time last year.

Since May 2021, household savings have consistently grown every month, except for June 2023.

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Note: Deposits from households include money in savings accounts, term deposits, transaction accounts and mortgage offset accounts.

Deposit2 research director, Sally Tindall, said:

“At almost $1.42 trillion, the household war chest is at an all-time high as Australians stockpile their savings in preparation for tougher times ahead.

While it’s fantastic to see so many Australians focused on tipping every spare dollar into their mortgages and savings accounts, these buffers are anything but evenly spread.

Households are feeling the heat from the RBA rate rises very differently across the country, with some families filing for hardship, while others are still filling up their savings accounts.

This record-high buffer comes at a time when calls to the National Debt Helpline are at elevated levels.

This articulates just how blunt the RBA’s cash rate lever actually is."

Total deposits by households, September 2023

Amount Monthly change Year-on-year change
$1.42 trillion $11.00 billion
$99.60 billion

Source: APRA monthly authorised deposit-taking institution statistics.

Household deposits continue to increase, but the growth rate has decreased compared to the previous month.

Governor Bullock mentioned this month that Australians, overall, are still saving money, but at a slower rate.

This differs from the situation in the US, where households have begun to reduce their savings.

Loans to households: owner-occupier + investor housing

The total amount of home loans held by Australia's largest bank, CBA, decreased for the third month in a row – a first in APRA's monthly ADI banking statistics going back to 2002.

In September, CBA's mortgage holdings dropped by 0.15%, around $793 million less compared to the previous month.

On the flip side, ANZ's home loan portfolio continued to grow, increasing by 0.91%, around $2.58 billion, exceeding the total growth for the month of 0.33%.

Westpac and NAB experienced growth of 0.27% and 0.31% respectively.

Among the big four banks, ANZ remains the only one offering cashback deals, while Westpac's subsidiaries like St George, Bank of Melbourne, and BankSA still provide this incentive.

Big Four banks: loans to households, housing

Amount Monthly change Year-on-year change Current share of ADI* market (Sept)
CBA $542.22 billion -$793 million
+$17.76 billion
Westpac $455.50 billion +$1.23 billion
+$17.64 billion
NAB $312.31 billion +$955 million
+$9.60 billion
ANZ $285.67 billion +$2.58 billion
+$21.09 billion
Total loans $2.13 trillion +$6.99 billion
+$99.25 billion

Source: APRA. *Authorised deposit-taking institutions.

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Note:   Loans to households: housing is a total of both owner-occupier and investor loans as recorded by APRA.

Ms Tindall further said:

"While the value of home lending also continued to rise, the latest APRA figures for September recorded another drop to CBA’s residential mortgage book, following declines in August and July.

The drops come on the back of the bank’s decision to pull its $2,000 cashback incentive for refinancers at the end of May.

CBA has been walking away from competition in the mortgage market since March of this year, in a combination of new customer variable rate hikes and the scrapping of its cashback, a strategy that hasn’t taken long to impact its mortgage book."

She highlighted that Many borrowers seeking relief are looking beyond CBA in search of either cut-throat rates or cold hard cash – sometimes both.


Tindall commented further:

"As soon as CBA pulled the pin on its cashback deal, other lenders tucked in behind.

The number of lenders now offering cashback incentives has almost halved in the five months since CBA ditched this contentious marketing tactic.

The database shows there are just 15 lenders still offering cashback to refinancers, including big four bank ANZ.

While ANZ’s cashback deal is half of what it was two months ago, at $2,000, that’s likely to be enough to incentivise some borrowers to switch. The bank is also offering a $3,000 cash sweetener to select first-home buyers, which may have also helped boost its loan book.

We expect ANZ’s home loan book will continue to increase at an accelerated pace while the bank has its cashback offers on the table."

About Robert Chandra is a Property Strategist at Metropole and has an intrinsic understanding of property markets backed by many years of real estate experience. This coupled with several degrees gives him a holistic perspective with which he can diagnose clients’ circumstances and goals and formulate strategies to bridge the gap.
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