Soaring property prices have taken the average home value to nearly double the size of a typical mortgage, new research shows.
Home owners with a loan from Aussie have on average accumulated 48 per cent equity in their property, worth $242,642, according to a report from the mortgage broker and market analysts CoreLogic RP Data.
Equity is the difference between the debt held on a home and the property’s value.
Home owners in NSW are in the strongest financial position, thanks to a property price explosion in the past three years, holding average equity of 57 per cent, worth $358,763.
Tasmanian home owners have the lowest equity in their homes, but it still stands at a healthy 33 per cent, worth $95,427.
The figures show property can be a major wealth creator, especially when compared to the current volatility on the share market, Aussie executive chairman John Symond said.
“The best investment both for security and lifestyle is still real estate,” he said.
“I see no reason why this will change over the next decade.”
Low interest rates, population growth and a lack of housing supply in the major cities will support the longer term performance of real estate, he said.
Housing hot spots Sydney and Melbourne were strongest cities for wealth generation, according to the report, with equity levels of 60 per cent and 51 per cent respectively.
CoreLogic RP Data research director Tim Lawless said areas close to CBDs have generally been the strongest performers.
AUSTRALIA’S TOP 10 COUNCIL AREAS FOR PROPERTY INVESTMENT
1 – Hunters Hill, NSW
2 – Canada Bay, NSW
3 – Ku-ring-gai, NSW
4 – Burwood, NSW
5 – Willoughby, NSW
6 – Ryde, NSW
7 – Boroondara, VIC
8 – Hornsby, NSW
9 – Waverley, NSW
10 – The Hills Shire, NSW
(Source: Aussie Home Loans and CoreLogic RP Data)
Originally published as House price boom delivers for owners
Australia Property And Development (APAD) provides a one stop platform on Australian properties information, properties management, taxation and migration services to help our clients build their property investment portfolio. Like our Facebook page to get the latest updates on special offers and property deals.
The world's best city for living is … Melbourne, Australia.
Posted by Business Insider on Tuesday, August 18, 2015