Best thing COVID has done for Millennials
The coronavirus recession is turning younger Australians into budget-conscious savers, NAB's millennial-focused digital subsidiary UBank says.
Newly appointed UBank chief executive Philippa Watson says saving for a home loan deposit remains one of the main investment goals for Millennials, despite the age demographic being one of the hardest hit from the economic downturn.
Historical low interest rates are fuelling a push for property ownership, with biannual research conducted by the bank revealing 44 per cent of millennial respondents aim to secure a loan deposit in the next five years.
Ms Watson, who shifted to the NAB group in June after more than 14 years at the Commonwealth Bank, said half of young respondents were saving a third of their salary each week to secure a home loan.
Another 25 per cent of young respondents were stashing away almost half of their salary to meet their deposit goals.
"The security of home ownership is front and centre for young Australians," Ms Watson said.
"They are working really hard and diligently to meet their savings goals."
UBank is bank geared towards younger people looking for a banking product solely based online.
A number of online neobanks are popping up within the Australian landscape hoping to capitalise on younger customers' lack of brand loyalty to the big four.
Xinja, Volt, 86 400 and a Bendigo Bank-affiliated Up are all seeking to attract customers online with simplified loan and savings products, and lower rates and fees compared to the incumbents.
Ms Watson said the low interest environment and a possible further rate by the Reserve Bank had made buying a property appear more attainable.
However, high property prices in metropolitan areas and income uncertainty during the recession continued to hindering young people from entering the housing market.
"In the short-term, affordability considerations have certainly eased off a bit but it is difficult in capital cities," Ms Watson said.
Ms Watson said remote working and greater flexibility in work arrangements due to the coronavirus pandemic had made moving to regional centres more attractive.
"We are going to have a much more mobile population," she said.
"I am hoping we will see a rebound or revitalisation of areas that previously weren't able to attract young people."
The bank's survey also found younger generations had embraced digital budgeting apps to reach their savings goals.
According to UBank, 68 per cent of Millennials used budgeting tools, while 58 per cent of Generation X and 59 per cent of Baby Boomer respondents actively kept budgets.
Originally published as COVID has made Millennials budget savvy