Length of Home Ownership has Increased
But will the trend continue?
Homeowners are holding onto their properties for far longer than in years gone by, according to the latest statistics from CoreLogic, with the length of homeownership averaging 11.3 years for houses and 9.6 years for units.
So what’s prompted the change and will it continue?
On September 5, CoreLogic released its latest findings on the length of homeownership in Australia, indicating property owners now hold their houses 3.8 years longer than they did a decade ago, while unit owners are likely to own their property 2.9 years longer.
The findings are based on sales from May 2018 to 2019, using the latest sold date and the previous sold date to establish how many years a property has been held for, between each transaction.
They reflect a trend that is seen across the capital cities but is more prevalent in some areas than others.
Length of increase by capital city
The latest data indicates greater Melbourne has the longest hold time for houses, followed by Sydney, Brisbane then Perth. Darwin currently has the shortest period of homeownership, and all capitals have risen over the past year, five years and 10 years.
- Melbourne – 12.5 years
- Sydney – 12.4 years
- Brisbane – 11.3 years
- Perth – 11 years
- Hobart – 10.9 years
- ACT – 10.9 years
- Adelaide – 10.1 years
- Darwin – 9.2 years
- Perth – 10.8 years
- Brisbane – 9.8 years
- Sydney – 9.6 years
- Adelaide – 9.6 years
- Darwin – 9.5 years
- Melbourne – 9.3 years
- ACT – 8.7 years
Why the change?
The increased property holding time is likely a further indication of what property owners and agents have expressed anecdotally.
Back in 2009, the property boom of the noughties was at its peak, with buyers and sellers keen to enjoy the value of a market that showed little sign of slowing down.
Fast forward 10 years and the landscape has shifted, particularly in the lead up to when these statistics were compiled.
Tightened lending conditions in recent years had impacted buyer’s borrowing capacity with many who were already in the property market content to stay where they were.
Further factors like this year’s election also slowed property transactions while the median property price had fallen in many capital cities over recent years.
But since May there have been a series of interest rate cuts, lending conditions have relaxed, and property prices are showing signs of rising. So will the trend continue?
Where to from here?
All signs indicate the property market may be set for a rebound with key markets like Sydney and Melbourne already on the rise.
Chances are that will spur homeowners into action. After years of holding for better conditions, now might just be the time that many choose to cash in on the asset they have held for the past decade.
If that’s the case, and we believe it is, it will be welcome news for sellers and buyers alike, including first home buyers who have been a particularly disadvantaged sector in recent years.