Owning a home in Australia is a major wealth generator.
That's the conclusion of a new report by Aussie Home loans andCoreLogic RP Data which found that the average property is now worth almost double the amount of debt against it.
That means Aussie property owners with a mortgage have an average of 48.4% equity in their home, or $242,642.
Not bad for a country of mortgagees burdened by debt!
Unsurprisingly, NSW tops the country with the average property owner now holding more equity in their property than debt, or 56.6% equity worth $358,763.
Tassie home owners have the lowest equity in their homes, but at a still healthy 32.7 per cent worth $95,427.
Looking at the capital cities, Sydney and Melbourne’s recent capital growth spurts have seen these cities top the equity leaderboard, with the ACT taking third position with Brisbane hot on its heels.
Sydney’s Hunters Hill took top spot in percentage equity at 72.3% worth $878,481, while Ku-ring-gai council topped it in equity value with close to $1 million in equity.
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Clearly the recent housing boom has given home owners in Sydney and Melbourne a bigger boost than other states.
As you'll see from the graphic below, council areas across the Sydney property market dominate a list of the top 20 regions ranked nationally by average level of home equity.
The only two non-Sydney council areas in the top 20 were Boroondara (66.3 per cent) and Whitehorse (64.9 per cent) in Melbourne's eastern suburbs.
Well, it means that the situation isn’t quite as dire as some ‘experts’ would like us all to believe.
It goes against the grain of much of the sensationalism about property bubbles and Australians being burdened by massive mortgages.
It also means that many Australian's have a large amount of equity that could you help achieve other goals, like property investment and that they have a financial buffer that will see them through lean times, meaning they won't have to sell up their homes causing a property crash like the doomsayers have been predicting.
Source: Aussie Home Loans