Almost 10 per cent of Queensland mortgage holders have little or no real equity in their homes, new research reveals.
ALMOST 10 per cent of Queensland mortgage holders have little or no real equity in their homes, new research reveals.
In the 12 months to October 2018, the value of 88,000 homes was equal or lower to the mortgage owed on them, according to a report by Roy Morgan Research.
After Western Australia, Queensland has the second highest proportion of mortgage holders with little or no equity in their home at 9.6 per cent.
But that number was even higher a year ago at 10.3 per cent, making Queensland the only state or territory to improve, rather than worsen, in the past 12 months.
Mortgage equity risk is a concern, according to Roy Morgan. Image: AAP/Glenn Hunt.
Nationally, the number of mortgage holders identified as having little or no real equity in their home has increased from 8 per cent to 8.9 per cent in 12 months.
Roy Morgan industry communications director Norman Morris said it placed home borrowers at considerable risk, particularly if home values continued to fall or households were hit by unemployment.
“Other potential contributing factors to this increase in mortgage stress include borrowers maintaining debt for other purposes rather than paying off their loan and the use of interest only loans,” Mr Morris said.
“If home-loan rates rise, the problem would be likely to worsen as repayments would increase and house prices decline, with the potential to lower equity even further.”
Houses in the Queensland suburb of Stafford. Image: AAP/Glenn Hunt.
Mr Morris said borrowers in lower-value homes continued to be among the most likely to be faced with the problem of little or no equity in their homes.
“Higher-value properties with a mortgage appear to be facing a much less risky position because they are likely to have had their loan longer and may have had a far larger deposit, particularly if they have traded up,” he said.
Mr Morris said it was likely the number of mortgage holders with no real equity would continue to increase nationally.
The survey was drawn from interviews with more than 50,000 Australians.