Real Estate

increases to mortgage rates will not stop australians holidaying

Written by The ReReport

Holidays are where it’s at. Picture: istock

WHEN IT comes to holidays, nothing stands in the way of Aussies.
So, despite many lenders increasing their mortgage variables rates recently, the majority of Aussie mortgage holders won’t cancel or downgrade their holiday plans — even if rates rise by as much as 0.5 per cent.
A survey, by InsureandGo, sought to uncover whether Aussies would downgrade or cancel holiday plans if interest rates increased by either 0.5 per cent or 0.25 per cent.
And the message was clear.
N-O spells no.

MORE NEWS Very Brady plan for The Brady Bunch house

Top tips to maximise small space

The ‘worst thing about Australia’

Regardless of the size of the rate rise, the survey — of 1000 people — showed that most Aussies would still travel as normal.

Barcelona cityscape with La RamblaHave you got plans this Christmas? Or are you staying home to pay the bills? Picture: Istock

More than half said they would travel as normal if their mortgage interest rate went up by 0.25 per cent, while just 16 per cent of all respondents would downgrade their domestic holiday to a cheaper one.
Seventeen per cent said they would downgrade to a cheaper overseas holiday and just 14 per cent would not go away on holidays at all if rates went up by 0.25 per cent.
And the defiant Aussie attitude seems to increase with age.
The older the mortgage holder, the more likely they are to keep their travel plans unchanged. The survey revealed that in the case of a 0.25 per cent rate increase, 74 per cent of over-60s, 57 per cent of those in their 40s and 50s, and 38 per cent of those in their 30s would hold to their travel plans.

IRONMAN 70.3 World Championships IRONMAN 70.3 World Championships QLD Garden EXPO IROQ Media Launch IVF VAMaybe a domestic trip is the G-O?

Do you think the mortgage can wait until next year?

The results were similar in the case of a 0.5 per cent rate rise: 47 per cent of mortgagees would holiday as normal, and just 16 per cent would not holiday at all.
Again, the older the respondent, the more likely they are to keep their travel plans unchanged: 73 per cent of over-60s, 50 per cent of those in their 50s, 44 per cent of 40-somethings, and 29 per cent of 30-somethings would keep their original holiday plans.
While it’s common for people to reduce unnecessary costs when household expenses increase, the data reveals that holidays matter to Aussies — with one in three (33 per cent) preferring to downgrade to a cheaper domestic or overseas holiday, than sacrificing travel completely.

Managing Director at InsureandGo Raphael Bandeira said “we’d like to think that travel spend is another barometer for consumer confidence.”
“While retail turnover figures have been stagnant — with growth of just 0.3 per cent in recent months — international trips by Australians grew 7.2 per cent in the year to July 2017 and 4.2 per cent in the year to July 2018,” he said.
“Australian domestic travel spend grew six per cent in the year to March 2018.
“For the travel industry, it’s heartening to see how much Australians value a getaway.
“We still find a way to travel, even when faced with new, financially-difficult challenges.”

Source link