Low interest rates aren't just good news for property buyers - renters are reaping the benefits too.
Financial conditions for renters have jumped 14 per cent in the first three months of 2015, according to new research by St George and the Melbourne Institute released on Thursday.
A surge in the number of property investors in recent years, thanks to enticingly-low interest rates, has produced an influx of new rental properties.
The additional supply is keeping a lid on rental prices, St George chief economist Besa Deda said.
"Rental vacancy rates are creeping higher across most capital cities, suggesting renters are benefiting from a softening in rental conditions," she said.
The Household Financial Conditions report showed that low interest rates were encouraging Australians to pay down debt and improve their homes, with a record number of people saving to renovate.
Mortgage debt had fallen by almost six per cent in the past year, the report said, while almost three quarters of Australians were servicing debts worth less than one quarter of their after-tax income.
The number of people preferring to invest their savings in real estate grew five per cent in the quarter, making property second only to bank deposits as the preferred place to park money.
"Australia's love affair with the property market shined through this quarter, with low interest rates directing households to real estate as a popular source of new savings," St George retail banking general manager Andy Fell said.
The figures suggested Australians were buying property as investors rather than owner occupiers, he said.
WHAT AUSSIES ARE SAVING FOR
1. Holidays
2. A rainy day
3. Retirement
4. Improve/renovate the home
5. Buy a house
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