As Australia continues to climb on all economic fronts, the positive effects are being felt by the man in the street, with the most encouraging aspect of all being the decline in unemployment. At this time last year there were fears that we were headed for a very serious recession, with widespread job losses. However, once again the Lucky Country dodged a bullet, and we are fast returning to a situation of job vacancies and skills shortages.

When consumer confidence is dented – for example through worries about employment – spending drops and people tighten their belts. Last year we all tended to hold off buying goods unless they were on ‘special’. And didn’t it seem like it was sale after sale throughout 2009?

But as 2010 is well underway, consumer confidence is rising strongly. The Roy Morgan Research Consumer Confidence index rating is up to 128.1 points. This means that 44 per cent of Australians expect their family to be financially better off this year.

Treasury secretary Ken Henry declared that the global financial crisis is over. The Australian unemployment rate has since fallen to an 11-month low. Business is picking up, while prices remain low, the property market is booming, and estimates of family finances and the economic outlook continue to improve.

The unemployment rate is sitting comfortably at 5.3 per cent. This growth in employment and the increase in job security mean that people are back out there hitting the shops, with both credit cards and cash!

The Reserve Bank announced that personal credit loans rose by 0.3 per cent in December, following a 0.1 per cent increase in November. Through 2009, total personal credit loans rose by a surprisingly strong 1.5 per cent.* This means that people are feeling more secure about their ability to pay off their loans because of the strong economy and a decreasing unemployment rate.

In this welcome climate of renewed growth, people are starting to think about how they are spending their money. Some are treating themselves to that new pair of designer shoes. Some are taking a well-earned vacation while there is still a bit of summer sun left. And some are using their dough to pay more into their home mortgage.

But, instead of maxing-out the credit card and accumulating debt that doesn’t provide any returns – except maybe a summer tan – a long-term opportunity is available in the form of investment property, which will grow in value over time, and pay rental and capital dividends for decades to come. It can also be sold down the track to pay off the home mortgage or to fund retirement needs.
It is in times like these that people who are serious about investing make their mark, and instead of rushing back into the shops as soon as the storm has passed, they instead make investments for the future.

So, how will you react now that the fears regarding job security have passed? Will you be looking for some retail therapy, or will you be looking to an investment option that will help you to build your family assets?

*AAP, Sunday, January 21, 2010 Households and improved job prospects drive credit growth

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