Australian homeowners are holding onto their properties for longer than previous years according to CoreLogic; 10 years ago, the average length of time Australians stayed in each property they owned was 7.5 years for houses and 6.5 years for apartments.
The latest analysis by realestate.com.au reveals the average hold time across both houses and units is around three years longer than it was a decade ago. As of late 2020, we were staying put for around 10.6 years in houses and 9.5 years in units.
This tightening of ownership has been attributed to the lack of available properties to buy in an environment of rising property values, creating uncertainty about being able to find a better alternative.
Australian housing value increased a further 1.6% in July according to CoreLogic’s national home value index, taking housing values 14.1% higher over the first seven months of the year, and 16.1% higher over the past 12 months.
Aside from the climbing property prices, the upward trend can also be attributed to the cost of selling and moving; particularly in relation to stamp duty. Executive Manager of Economic Research for realestate.com.au Cameron Kusher says:
“Property prices are so high now, and the costs associated with buying and selling properties are also high, which dissuade transactions wherever possible; for example, the rising cost of stamp duty is clearly a key driver behind Aussie homeowner’s decision to stay put for longer.”
“Stamp duty is a really large cost now compared to the average wage and because house prices have risen relative to incomes over the last two decades – and the stamp duty rates obviously rise with prices – it means that Australians are spending a larger share of their average wage every time they change house,” Grattan Institute program director for household finances Brendan Coates said.
The short market supply and inability to find a suitable alternative property to move into, are other reasons that people are staying ‘put’ for longer; and many homeowners are turning to renovation instead of selling.