Property helps Aussies top rich list

A new report reveals property has helped Australians become the richest people in the world.

The study by the investment bank Credit Suisse found that every Australian adult was worth an average $US225,000; well ahead of the Belgians, who achieved second-place at $US173,000.

The study found that the average Australian household had $319,700 of equity in their homes, which represented about 60 per cent of each person’s wealth.

This comes as recent data showed 1.8 million Australians own an investment property or 6.52 per cent of the overall population.

According to recent data from the Australian Bureau of Statistics, investor lending now constitutes 50 per cent of all home loans in the country.

RP Data senior research analyst Cameron Kusher said that investors looking to buy into ‘hot’ markets such as Sydney and Melbourne have arguably missed the boat by a good two years.

Mr Kusher also fears a glut of investor property could hit the market if other investment asset classes – such as shares – improve.

“I think that’s a very real risk at the moment,” he said. “Housing has always been a long-term asset class and at the moment investors are simply shopping around to park their money somewhere; but are these investors in there for the short or the long term?”

Mr Kusher also feared that, due to low rates, investors may be unconsciously over-borrowing.

“That’s certainly a trap people could fall into – whether that’s from brokers or banks or just a lax attitude by the borrower because borrowing’s so cheap at the moment,” he said.

 

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