More than 41 per cent of Australian homes are now worth more than twice what their owners originally purchased them for.
According to the latest Value Accumulation Report, conducted by RP Data, nationally just 5.4 per cent of Australian dwellings were estimated to be worth less than or equal to the price at which they were originally purchased for – down from 6.1 per cent at the end of last year.
Over the five years to March 2012 capital city home values increased by about 21 per cent – providing home owners with a significant wealth boost.
That said, home values have appreciated at a much slower rate over this period than they did during the preceding five years.
“Since late 2010, Australia’s housing market has been comparatively weak with home values falling by 6.5 per cent across the combined capital cities since the market peaked,” RP Data’s research analyst Cameron Kusher said.
According to Mr Kusher, there are some significant variations across regions of the country, with a number of markets having more than 10 per cent of homes worth less than or the same as the initial purchase price.
Alternatively, there are many regions with less than 4 per cent of homes worth less than the price at which they were purchased.
The report also looked at those homes that sold during the first quarter of 2012 and what proportion of those sales generated a gross profit or loss.
Of those homes sold over the first quarter of 2012, 12 per cent recorded a sale price that was lower than the original purchase price.
“In particular, those dwellings that were purchased on or after 1 January 2008 showed much greater potential to sell at a loss with 27.5 per cent of properties sold over the March quarter recording a loss compared with 7.2 per cent of sales where the purchase date was prior to 1 January 2008,” Mr Kusher said.
RP Data’s Value Accumulation Report measures the difference between the original purchase price and the current estimated value for over 8 million residential properties across the country.
Current estimated values used in the analysis are based on RP Data’s automated valuation model which provides a computer generated valuation report for all dwellings across Australia.