The Millennial generation is the largest cohort prioritising home ownership over lifestyle aspirations, new data from Bankwest has found.
After analysing the savings patterns of nearly 1 million customers over the course of the pandemic, Bankwest compared the achievements of those who had set savings goals through the Savings Goal feature in the Bankwest mobile app, against those who had not.
The bank found that across all generations of goal-setters, Millennials (those aged between 23 and 38) were the cohort that were most focused on saving for a home at the expense of lifestyle savings, such as travel.
Breaking down the goal distributions by generation, more than a fifth of Millennials were saving for a home (21.18 per cent), the largest of any other generation.
This contributed to a 49.58 per cent increase in customers saving for a home over the six months March-August 2020. A similar increase was reported for those saving for a “big purchase” (49.58 per cent).
Overall, however, saving for a home was found to be the third most common savings goal across customers, behind “just saving” and “travel”, which held firm as the second most common goal despite ongoing restrictions.
The bank analysis also revealed the significant impact of goal setting on savings balances, after finding that the average savings balance of those with a savings goal grew by 41.77 per cent year-on-year to the end of September, compared with just 13.67 per cent for those without goals.
Bankwest chief customer officer Paul Vivian commented: “We’ve known for a while through the data we see that the stereotype of Millennials as carefree money wasters isn’t true, and this is another example.
“We’re in a period of unprecedented uncertainty, but also a period of low interest rates, and it seems like Millennials are seeing both as a reason to prioritise saving for a roof over their heads.
“They’re not alone in reprioritising, either, and it’s probably not surprising to see a stall in the growth in the number of customers setting travel goals, and instead squirrelling away pennies elsewhere.
“What was also interesting was the impact on savings balances by simply having a goal, which makes sense, as not having a goal is like expecting to get somewhere without knowing the destination,” he concluded.
The Bankwest data echoes that released by ING, which found that a third of Millennials and a quarter of all Australians expect to buy a property in the next two years, with many having used the lockdown to accelerate their home ownership journey, according to ING research.
Annie Kane is the editor of The Adviser and Mortgage Business.
As well as writing about the Australian broking industry, the mortgage market, financial regulation, fintechs and the wider lending landscape – Annie is also the host of the Elite Broker and In Focus podcasts and The Adviser Live webcasts.
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