Australian’s have a substantial amount of equity in their homes.

The average home is now worth close to double what is owed on it, according to a new report by Aussie Home Loans and CoreLogic RP Data.

It found owners had on average accumulated 48.4 per cent equity in their properties — an average of $242,000.

Not surprisingly with prices surging in New South Wales in recent years, those owners have more equity in their property than any other state.

The average NSW owner held about 56.6 per cent of equity in their home — equivalent to $358,763.

Even though Tasmanian owners had the lowest amount of equity in their homes, it still equated to more than a third of the value.

Average level of home equity in percentage and dollar value terms.

Aussie executive chairman John Symond, said the figures showed that property could be a great wealth creator for owners.

“Especially when compared with the current correction being experienced in the share market,’’ he said.

“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.

“This (report) shows that over time property has proven time and time again that on the basis that you don’t try to pick a period of six months or a year or whatever that over the median to long term it is a safe bet.

John Symond warned tinkering with property legislation could end up costing the government more than it saved.Source:News Corp Australia

“Even I was surprised when you look at the national average equity of all capital cities and regional Australia you are talking nearly 50 per cent equity, so that is a good news story for a country with an ageing population and it’s a good news story for government, that’s why government would be very silly to tinker with negative gearing and the like because this will provide a huge relief on government coffers in the decades ahead.’’

“Either way you look at it, it should be a good news story, one of the reasons we did this (report) is because of all the scaremongering talk about property bubble and prices are going to drop by 50 per cent and all of this and it hasn’t been backed up with the critical data.

Mr Symond said even the capital cities with the lowest levels of equity had pretty solid results.

“Even the areas where you think have been knocked for six like Perth and you look at the Perth market at 39 per cent (of equity on average), the Perth market has been kicked in the guts worse than anywhere else.’’

Mr Symond said he was very concerned what possible changes to negative gearing could have on the property market.

Average level of home equity.

Mr Symond said Sydney and Melbourne had been the fastest growing capital cities.

“The lower equity levels in Adelaide (39.4 per cent), Brisbane (41.4 per cent), Darwin (37 per cent) and Hobart (35.5 per cent) largely reflect the lower price growth the cities have experienced over the last 20 years.’’

CoreLogic RP Data research director Tim Lawless said the longer a property has been owned, the more time owners have had to experience price growth and reduce their mortgages.

Download the report here.