Home owners in Victoria & New South Wales hanging on to property longer

Home owners in Victoria & New South Wales hanging on to property longer
Cameron KusherDecember 7, 2020

Home owners in Sydney and Melbourne are holding onto their houses longer while owners in Melbourne and Hobart are doing the same with their units.

The average length of ownership for residential properties is continuing to increase. This indicates to us that home owners are moving less frequently. For houses, today’s results show that the average hold period across Australia’s capital cities was 10.1 years at the end of 2013, and for units it was 8.4 years. In the regional markets, the hold period was slightly less for houses at 9.5 years while for units it was longer at 8.6 years.

This highlights a consistent increase in the average hold period since about 2004/05. The rise coincides with the national surge in home values from 2001 to 2004 and the subsequent fall in sales volumes thereafter.

Across the individual capital city housing markets, the average hold period trended higher across each market over the past decade. The results also show that houses in particular tend to be held for much longer in Sydney and Melbourne than they do elsewhere.

By the end of 2013, Melbourne had the longest average hold period for houses and units recorded at 11.4 years and 9.4 years respectively. Sydney houses had the second longest average hold period at 11.0 years while for units Hobart held second longest hold period at 8.5 years. Each capital city has recorded an increase in the average hold period for houses and units over the past year.

Across the country’s council areas, Auburn in New South Wales is the area with the longest average period for houses at 15.5 years. For units, New South Wales and Victoria dominated the list; however, most of these areas are situated outside of the capital city.

Across the country, the shortest average hold periods are generally found in Western Australia for houses and in Queensland for units; Weipa in Far North Queensland has the shortest average hold period for both houses and units at 5.3 years for houses and 3.3 years for units. The regions with the shortest average hold periods are typically found outside of the capital cities.

The data shows that the typical hold period is increasing.

As we see a rise in property values rising, and the subsequent transactional cost of buying and selling properties increasing at the same time, it is no wonder home owners are choosing to move home less regularly.

The cost of agency fees and stamp duty acts as a disincentive to buy and sell property. Over the coming year we would expect that the trend towards longer period of home ownership will continue to be evident.

Research Notes:

An important figure to be aware of is the average length of property ownership, or the ‘hold period’ of a property. The typical hold period provides one of the best indicators about the likelihood as to whether a property will be brought to the market in the near future. RP Data measures the average hold period by looking at sales over the past year and determining the length of time each of those properties had been owned (i.e. the most recent contract date minus the previous purchase date).

Cameron Kusher

Cameron Kusher is senior research analyst at CoreLogic RP Data.

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