Almost 50 per cent of Australians expect the economy to worsen before the end of the year.
According to CUA’s National Mortgage Survey, Expectations and Intentions, 48 per cent of respondents admitted to having a pessimistic view of the state of the economy, while just 10 per cent believe the economy will improve before the year’s end.
The survey revealed the falling Australian dollar and the predicted end of the resources boom are causing concern, with almost six in 10 people stating that these factors would impact any financial decisions.
CUA general manager, products and marketing Jason Murray said prevailing issues in the current economic environment are clearly making Australians cautious about making financial decisions.
“Even a new or reinvigorated government following the federal election in September doesn’t appear to be buoying their outlook,” he said.
When it comes to interest rates, CUA’s survey shows that Australians’ expectations are at odds with industry commentators. Experts are currently tipping the official cash rate to either fall or stay the same by the end of 2013, while 37 per cent of Australians said they expect rates to rise.
“The official cash rate is already at a 30-year low and despite some experts predicting that it will go lower, and also given the current economic landscape, Australians are still uncertain. Our research does, however, highlight that women are more inclined to think rates will increase towards the end of the year than men – 47 per cent versus 28 per cent,” Mr Murray said.
"For homeowners, uncertainty about interest rates may invariably trigger a trend towards mortgage fixing. CUA’s survey certainly reflects this, showing that 36 per cent of Australians who currently have a variable rate mortgage are planning to fix their mortgage rate in the future.
“This has increased by seven per cent from January, when three in 10 had this intention.
“Young Australians under 30 are more likely to seek certainty in their repayments, with 56 per cent planning to fix their mortgage in the future.”