As we watch house prices tumble and lenders increase their mortgage variables rates, it seems the majority of Aussies won’t cancel or downgrade their holiday plans – even if rates rise by as much as 0.5 per cent.
According to a survey commissioned by InsureandGo, more than half (53 per cent) of Aussie mortgage holders would travel as normal if their mortgage interest rate went up by 0.25 per cent.
Just 16 per cent of all respondents would downgrade their domestic holiday to a cheaper one, 17 per cent 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.
The survey further 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.
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.
“We’d like to think that travel spend is another barometer for consumer confidence,” Raphael Bandeira, Managing Director at InsureandGo, said.
“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. Australian domestic travel spend grew 6 per cent in the year to March 2018.”
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