An increasing number of homes are in negative equity territory. Source: news.com.au
THE number of Australian homes worth less than what their owners paid for them is growing.
One in 20 homes across the country is worth less than their purchase prices. House prices tumbled 3.3 per cent in the past year and the nation’s property malaise continues, according to new research.
And the percentage of “negative equity” homes climbed from 3.7 per cent in mid-2011 to 4.9 per cent at the end of the September quarter, research released yesterday by RP Data showed.
Thousands of homes are sitting on the market – and Melbourne is the worst offender.
However, Melbourne has held up better than Sydney and most capitals in terms of negative equity, the RP Data report says.
Victoria’s Mallee and Ovens and Murray districts were among the worst, with 9.8 per cent of properties in negative equity.
“Victoria has been a stand-out performer, but it will be important to keep our eye on the employment situation,” he said. “There will be a lot more pressure on people to pay off their mortgages and to keep their job.”
Only 1.9 per cent of Melbourne homes are worth less than their purchase price – the lowest of all capitals, except Canberra.
The proportion of homes worth twice their original purchase price dropped from 55.1 per cent to 53.4 per cent.
But the city has more unsold homes on the market than any other city in Australia, separate research finds. There were 43 per cent more unsold homes on the market in Melbourne last month than in the previous December, SQM Research found.
The national average rise in stock levels was 18 per cent.
Melbourne had 48,586 houses and units for sale in December, compared with 33,865 a year earlier.
SQM Research managing director Louis Christopher noted an uptick in housing finance approvals after interest rates fell in November and December, possibly signally the start of a modest