The report – a collaboration between Aussie and CoreLogic RP Data – shows that home owners with a mortgage in either city or regional areas have on average accumulated 48.4% equity in their properties, worth approximately $242,642.
New South Wales home owners have come out on top due to a price surge in the state’s property market over the last three years. In NSW, the average property owner holds equity of 56.6%, worth $358,763.
Tasmanian home owners have the lowest equity in their homes; however, they still hold 32.7%, worth $95,427.
Aussie chief executive James Symond says the strength of the property market as a wealth creator for Australians is unlikely to change in the future.
“Our data confirms that property can be a great wealth creator for owners, especially when compared with the current correction being experienced in the share market.
“I believe the best investment both for security and lifestyle is still real estate and I see no reason why this will change over the next decade, especially in view of the lower interest rate climate, lack of housing supply in the major cities and continuing population growth.”
Looking across the capital cities, Sydney and Melbourne unsurprisingly have the highest average level of home equity, with home owners holding 60.1% and 50.7% respectively. This is followed by Canberra (42.8%), Brisbane (41.4%), Adelaide (39.4%) and Perth (39%).
The lower levels of equity in Darwin (37%) and Hobart (35.5%) largely reflect the lower price growth the cities have experienced over the last 20 years.
“The longer a property has been owned, the more time owners have had to experience price growth and reduce their mortgages,” CoreLogic RP Data head of research Tim Lawless said.
“The figures show that areas close to the CBDs have generally performed better as the population becomes more compressed with more medium to high density dwellings.”
To read the original article in Australian Broker click here