here is better calculation
based on house prices in wa and tcisbosses figure for debt
"the average Aust loan is 226,100 for a person who is not a first home buyer the av for first home buyer is 228,600"
say 226,100
in perth the average house is $426,000
the balance sheet looks like this
assets = $426,000
liabilites = $226,100
equity = $200,000
debt/equity = 113%
gearing is about 53%
house prices would have to fall 46% to wipe out all the equity
60% of australians wealth is in houses
if the market fell 23% from here home owners would lose $100,000 or half their equity
the interesting thing is that the australian stockmarket has fallen 42% this year
who is to say that house prices won't follow suit?
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- the median house price rose by 14000
the median house price rose by 14000, page-58
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