Just 3.7% of Australian dwellings nationwide are estimated to be worth less now than when they were originally purchased while 45.1% of homes are estimated to be worth at least double their original purchase price.RP Data's Equity Report provides a base level estimate of equity accumulation across the Australian housing market by measuring the difference between the original purchase price of a home and the current valuation for individual properties around the country.
Property valuations used in the analysis are based on RP Data's automated valuations model where the value of more than eight million dwellings is estimated each week across Australia.
RP Data calls that a base level estimate of equity, because its analysis doesn't factor home owner debt levels into the equation.
At a minimum, Australian mortgage holders would be covering interest payments on their loan while most mortgage holders are also paying down the loan principal.
Additionally home owners may have drawn upon their equity in the past, which means their debt level may have increased relative to the property value.
The strong growth in Australian property values during recent years has been the major reason why most regions enjoy quite a strong level of equity.
During the five years to June 2011 capital city home values increased by about 30%, providing a significant wealth boost to most home owners during that period.
More recently the Australian housing market has softened and home values are down 2.7% between their October 2010 peak and June 2011.
Recent buyers who purchased a home during that time have potentially seen the value of their home move below their contract price.
The headline results from RP Data's equity analysis show that only 3.7% of Australian homes are valued at a lower amount than the price for which they were purchased.
At the other end of the spectrum about 45% of Australian homes are worth more than twice what their owners originally purchased them for.
There is some variation between regions, with areas that have recorded a more severe downturn in home values in recent times recording higher proportions of homes in negative equity.
North Queensland and south-eastern Western Australia are showing more than 10% of dwellings to be worth less now than the price at which the home was originally purchased.
The findings also point to the fact that the length of tenure has a large impact on equity accumulation.
As would be expected, homes held for a longer time frame have accumulated more equity than those held for a short amount of time.
Similarly, homes purchased after 2007 have a higher propensity to show negative equity because many of those homes were purchased after the significant housing market gains recorded between 2000-2004 and during 2007.
Far North Queensland and south-eastern Western Australia are showing the largest proportion of properties in a negative equity situation. at 13.5% and 11.2% of all dwellings respectively.
Other lifestyle markets such as Queensland's Gold Coast and Sunshine Coast also show a large proportion of homes in negative equity.
The regions with the highest proportion of homes that are now worth at least double compared to their original purchase price are typically located in regional markets where values have moved from a low base and housing markets have seen some long term improvements in housing values.
The exception is the Melbourne metro area, which is the only capital city to fall within the top 10 list of regions enjoying the largest proportion of homes with more than 100% equity accumulation.
Based on the analysis of homes purchased after 2007 the findings show that 7.7% of properties nationally are now worth less than what they were originally purchased for.
Across the capital city markets the estimated proportion of homes recording negative equity is slightly better at 6%.
The highest proportions of negative equity post-GFC are located in Queensland (13.3%), Western Australia (9.6%) and Tasmania (9.5%).
