CoreLogic RP Data research analyst Cameron Kusher has released research that shows homes are being owned for longer across Australia, with the average number of years a capital city house is owned climbing from 6.8 years a decade ago to 10.5 years over the past 12 months.
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 houses over the decade while Sydney and Melbourne (both 2.4 years) recorded the smallest increases for units.
Across the council areas, the region to record the shortest hold period was the Darwin region of Palmerston with a hold period of 5.7 years, while the regional southeast Queensland area of Somerset has the shortest average hold period for units at 4.6 years.
According to Kusher, many of the regional areas listed are smaller regional townships linked to the mining and resources sector. Interestingly, he notes that there are very few New South Wales, Victorian or Tasmanian council areas on either lists of shortest average hold period.
New South Wales and Victoria emerge as the areas that 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 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, Kusher found that homes tended to sell on a more regular basis than their capital city counterparts.
According to Kusher, over recent years there’s been an ongoing trend towards homes being held for longer. Since the middle of 2005, the average hold period has continued to trend higher, which has occurred alongside a reduction in transactions.
“With the hold period continuing to trend higher at a national level across all capital cities, it’s evident that home owners are moving less regularly than they have in the past.
“This is further highlighted by the fact that 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,” he continues. “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,” Kusher concludes.