New data have revealed an increasing number of home owners are staying in their current property for longer.
According to the latest information from RP Data, the average length of ownership for houses and units (based on properties sold over the year) is now 9.3 years, and 8.2 years respectively – up from 6.8 years, and 5.9 years 10 years ago.
RP Data’s research analyst Cameron Kusher said the longest hold periods were recorded in Melbourne, with houses in the city being held for 10.8 years.
Sydney followed, with houses held for 10.1 years and units for 8.2 years.
Across individual council areas, the West Wimmera council area in Victoria had the country’s longest average hold period over the year at 14.7 years for houses.
For units, Colac-Otway in Victoria had the longest average hold period at 12.9 years.
Regional and coastal areas of Victoria dominated the list for both houses and units in terms of the regions with the longest average hold period.
Mr Kusher said this highlights the fact that property owners in Victoria tend to hold their homes for a longer period of time.
“It probably also reflects the fact that rates of stamp duty in Victoria are generally higher than those in other states which acts as a further disincentive to sell if you have to re-purchase,” he said.
On average, the shortest hold periods in the regions are mainly found in those areas associated with the mining and resources sector, such as Port Hedland in Western Australia where the hold period for houses is just 4.4 years, and in Weipa in far north Queensland which recorded the shortest hold period for units at 3.4 years.
“The average hold period for houses and units remained relatively static until late 2005 – it has, however, increased consistently from this time where we have seen a sharp rise in the length of time homes were held for over recent years,” Mr Kusher said.
“An increase in holding periods is logical when measured against the decline in sales. Added to this is the fact that the population has continued to grow given that home values have risen. As a result, transaction costs such as agent commissions and stamp duty have also increased.
“Clearly, there is no incentive for home owners to move more frequently.”
The data highlight a sharp increase in average hold periods over recent years where, at the same time, a decline in sales volumes highlights the challenges of relatively high home values, particularly in capital cities.