The latest Westpac Melbourne Institute Index of Consumer Sentiment shows real estate was considered the wisest place for savings by 14.3% of respondents, the lowest recording in five years.

Overall consumer confidence declined 3.9% in December

Most people - 29.5% - favoured putting new savings in the bank. Repaying debt was the second most favourable option at 20.5%, and 6.1% of survey respondents said the best thing to do with new savings was spend it - the highest response in that category in two years.

Source: CommSec.

Bill Evans, chief economist of Westpac, said over the year the survey showed a marked increase in risk aversion.

"A year ago over a third of consumers favoured either real estate or shares as the ‘wisest place for savings’," he said in a statement. 

"That compared to 44% favouring either bank deposits or ‘paying down debt’," said Evans, but said this month’s survey shows respondents said putting the money in the bank (23%) or paying down debt (50%) were the wisest places for savings.

Evans said the results show "a clear increase in risk aversion."

Craig James, chief economist, CommSec, said it "may not come as a surprise" to find that most people believe the bank is the best place for savings. 

But James pointed out that real estate has appeared to "fall from favour", with the "lowest reading in five years".

"Clearly many Aussies believe that the housing market has peaked and prices are likely to soften with more stock coming on the market," he wrote in an economic note. 

See also:

Saving won't make you wealthy - but buying will

Confidence steady as Australia faces longest election campaign in 60 years

RBA: "sentiment may be turning" in Sydney and Melbourne