The high costs associated with property means Australians are reluctant to move, according to new research which reveals that homes are being owned for longer and longer.
The research conducted by CoreLogic RP Data shows that the average number of years a capital city house is owned has climbed from 6.8 years a decade ago to 10.5 years over the past twelve months.
New South Wales and Victoria have emerged 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.
Queensland and the Northern Territory have the shortest average hold period. Palmerston in the Northern Territory has the shortest average hold period for houses at 5.7 years and Somerset, located in Queensland, has the shortest average hold period for units at just 4.6 years.
Cameron Kusher, CoreLogic RP Data research analyst, says that over recent years we’ve seen 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.
“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.”
Kusher says Australians may be reluctant to move due to the high costs associated with entering and exiting the property market. This means many Aussie
s may be living in inappropriate accommodation for their needs.
“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,” he said.
“We see no evidence to suggest that over the coming year the average hold period of properties selling won’t increase further.”