Aussies prefer the holiday road

Australians are now saving more for their holidays than their retirement, a new study reveals.

The national survey also backs up the stereotype that Sydneysiders are obsessed with real estate, with residents more likely to put their savings into bricks and mortar while Melburnians favour shares or managed funds. One in three Australians prefer investment in real estate over other forms of saving.

The proportion of households saving to take a holiday or travel was 31 per cent, placing it as the number one priority ahead of a retirement nest egg at 29 per cent and saving for a home at 23 per cent.

The Melbourne University survey of 1,200 households in all states and the ACT found saving patterns in the February quarter showed respondents believed the outlook for the economy was positive.

"It would seem that householders at present are less worried about saving for a rainy day and this signifies a growing confidence in a strong and healthy economy," said Dr Rebecca Valenzuela of the University's Melbourne Institute of Applied Economics and Social Research.

The number of Australian households spending more than they earned dropped to a five year low in the quarter, pointing to an improved financial position for a greater number of households.

The survey also found that almost three quarters of people aged 50 and over reported having no debt, along with 72 per cent of people earning less than $20,00 a year.