Aussies keeping properties for longer

By www.switzerbroker.com.au, 26 November 2010

Australian home owners are holding on to their houses for longer, new research from RP Data shows.

Houses that were sold over the year to August 2010 were owned on average for 8.3 years, according to RP Data. This compares to the period 2000-2005, where the average holding time for a property remained relatively flat at around 6.5 years for houses and six years for units.

Research analyst Cameron Kusher says since this time, the average length of tenure has shown a consistent upwards trend.

“The reason for steady average length of tenure between 2000 and 2005 is due to value growth which was strong over the period, as well as affordability – as a result, there was greater market speculation in the market and property owners were prepared sell more frequently,” he says.

Property owners in Melbourne are holding on to their properties of a similar amount of time as they were five years ago – which RP Data attributes to Victoria’s high stamp duty rates.

“Nationally, the average hold period for houses has increased by 1.7 years during the past five years and by 1.4 years for units. During this period, the average holding time for houses has increased by as much as 1.9 years in Sydney and Canberra and by as little as 1.1 years in Melbourne,” says RP Data.

“Across the unit market, the average length of tenure has increased by the lowest amount in Melbourne (0.5 years) and by as much as 2.2 years in Hobart.”

House value growth in Sydney and Hobart has been lower than all other capital cities during the five year to 2010, which Kusher says explains why property owners are holding onto their properties for longer as they await capital growth and a potential boost to equity.