New figures from RP Data Property Pulse reveal a growing trend of Australians holding on to their residential properties for longer periods of time.
Data showed that before selling properties, Australia’s house owners hold on to their houses for an average nine years and 7.7 years for unit-holders. The longer time of holding on to properties was said to be due to the higher prices and costs of buying and selling a property.
Cameron Kusher, RP Data’s research analyst, stated, “The average hold period for houses and units was fairly static until late 2005 and actually began to decline during the 2001-04 property boom, however, it has since consistently increased.”
At the same time last year, houses were held for 8.5 years and units 7.4 years. Compared to other capital city markets, Melbourne holds the record for the longest average hold period for its houses at 10.4 years and units at 8.3. Sydney house owners kept houses for an average 9.8 years. In the year 2000, houses in Melbourne were held for an average period of 8.4 years and 6.3 years for houses in Sydney.
Kusher shared, “Given that Sydney and Melbourne are the most populous capital cities as well as two of the most expensive, it’s no surprise to see that they also have the longest tenure. It appears that home owners are increasingly likely to keep their current properties rather than upgrade due to the significant cost.”
“The trend towards longer tenure is apparent across each capital city market – all of which are showing an increase in the average hold period of both houses and units over the past year. Currently, the average hold period across each capital is much higher than it was five years ago and substantially higher than they were in 2000.”
In the context of buying and selling properties, it is obvious that it is now more expensive because of the fact that properties cost higher nowadays not to mention higher costs of stamp duty and commissions for real estate agents.
In addition, the times have also made it harder for property values to accrue like they used to be as evidenced by another survey from RP Data showing capital cities home values falling 5.3 per cent in the 12 months to April 2012.
Kusher shared that instead of moving, home owners would rather upgrade their existing properties. “Affordability barriers mean that people are more likely to choose to upgrade their current home rather than purchase a new one.”