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People Owning Homes For Longer

Peet-Homes

Homes are being owned for longer, with the average years of home ownership in capital cities climbing from 6.8 years a decade ago to 10.5 years over the past 12 months, according to new research.

Across the capital cities over the past decade, Hobart (4.4 years) and Canberra (4.3 years) recorded the greatest increase in average hold period for houses. Hobart (4.2 years) and Adelaide (3.8 years) have recorded the biggest increases for units. Melbourne and Perth (both 3.3 years) recorded the smallest increase in average hold period for 9.0 houses over the decade while Sydney and Melbourne (both 2.4 years) recorded the smallest increases for units.

The research was compiled by CoreLogic RP Data research analyst Cameron Kusher.

Across the council areas, the region to record the shortest hold period was the Darwin region of Palmerston with a 5.7 years hold period while the regional south-east Queensland area of Somerset has the shortest average hold period for units at 4.6 years.

According to Mr Kusher, many of the regional areas listed are smaller regional townships, many of which are linked to the mining and resources sector.

Interestingly, he noted that there are very few New South Wales, Victorian or Tasmanian council areas on either lists of shortest average hold period.

The longest average hold period in 2014 in the council areas were more varied than the list for the shortest hold periods with both regional and capital city council areas on the lists.

New South Wales and Victoria emerge as the areas which typically have the longest average hold period. Auburn in Sydney has the longest average hold period for houses at 15.7 years and Greater Shepparton in north-western Victoria has the longest average hold period for units at 12.6 years.

Homes which were sold in 2014 across the combined capital cities showed that houses had been owned for an average of 10.5 years and units for 8.7 years. A year earlier the average hold period of those homes sold was 10.1 years for houses and 8.4 years for units.

Across the regional markets, Mr Kusher found that homes tended to sell on a more regular basis than their capital city counterparts.

At the end of 2014, the average hold period of a regional house was 10.0 years compared to 9.6 years at the end of 2013; units were typically held longer than those in a capital city at 8.9 years compared to 8.6 years at the end of 2013.

According to Mr Kusher, over recent years there has been an ongoing trend towards homes being held for longer. Since the middle of 2005, the average hold period has continued to trend higher. This has occurred alongside a reduction in transactions.

“We’ve also noticed that the trend towards homes being held for longer is evident across each individual capital city where on average, houses are currently held for longer than units across each capital city. Melbourne also has the longest average hold period of all capital cities for houses and units," he said.

“With the hold period continuing to trend higher at a national level across all capital cities it is evident that home owners are moving less regularly than they have in the past. This is further highlighted the number of houses and units selling at a national level is much lower than the peak in 2003-04, despite the fact that the overall national population is much greater now.”

“High home entry and exit costs no doubt play a large role in homes being more tightly held. Charges levied on the sale price such as stamp duty and agent commissions no doubt act as a disincentive for home owners to move on a more regular basis or alternatively move to more appropriate accommodation as their needs evolve over time.

“We see no evidence to suggest that over the coming year the average hold period of properties selling won’t increase further."

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Article originally posted at: https://https://theurbandeveloper.com/articles/average-years-of-home-ownership-on-rise