Across Australia, homes are being owned for longer, with the average number of years a capital city house is owned climbing from 6.8 years a decade ago to 10.5 years over the past twelve months.
An analysis of the homes which were sold in 2014 showed that across the combined capital cities, houses had been owned for an average of 10.5 years and units for 8.7 years.
A year earlier the average hold period of those homes sold was 10.1 years for houses and 8.4 years for units.
Across the regional markets, homes tend to sell on a more regular basis than their capital city counterparts.
At the end of 2014, the average hold period of a regional house was 10.0 years compared to 9.6 years at the end of 2013.
Units were typically held longer than those in a capital city at 8.9 years compared to 8.6 years at the end of 2013.
As the first chart shows over recent years there has been an ongoing trend towards homes being held for longer.
The chart shows that since the middle of 2005 the average hold period has continued to trend higher.
This has occurred alongside a reduction in transactions.
Average hold period of capital city houses and units over time
The trend towards homes being held for longer is evident across each individual capital city. Houses are currently held for longer on average than units across each capital city.
Melbourne also has the longest average hold period of all capital cities for houses and units.
Over the past decade, Hobart (4.4 years) and Canberra (4.3 years) have recorded the greatest increase in average hold period for houses and Hobart (4.2 years) and Adelaide (3.8 years) have recorded the biggest increases for units.
Melbourne and Perth (both 3.3 years) have recorded the smallest increase in average hold period for houses over the decade while Sydney and Melbourne (both 2.4 years) have recorded the smallest increases for units.
Capital city average hold periods over time*
The council areas across the country with the shortest average hold period are largely located outside of the capital cities, reflective of homes being held longer in capital cities as opposed to regional areas.
Palmerston, which is in Darwin, has the shortest average hold period for houses at 5.7 years while the resource regional south-east Queensland area of Somerset has the shortest average hold period for units at 4.6 years.
Many of the regional areas listed are smaller regional townships, many of which are linked to the mining and resources sector.
Interestingly, there are very few New South Wales, Victorian or Tasmanian council areas on either lists of shortest average hold period.
Council areas with the shortest avg hold period
The council areas with the longest average hold period in 2014 are a little more varied than the list for the shortest hold periods with both regional and capital city council areas on the lists.
New South Wales and Victoria are most prevalent on the lists of longest average hold period.
Auburn in Sydney has the longest average hold period for houses at 15.7 years and Greater Shepparton in north-western Victoria has the longest average hold period for units at 12.6 years.
Council areas with the longest avg hold period
With the hold period continuing to trend higher at a national level and across all capital cities it is evident that home owners are moving less regularly than they have in the past.
This is further highlighted by the fact that at a national level the number of houses and units selling is much lower than the peak in 2003-04, despite the fact that the overall national population is much greater now.
The high entry and exit costs of a home no doubt play a large role in homes being more tightly held.
Charges levied on the sale price such as stamp duty and agent commissions no doubt act as a disincentive for home owners to move on a more regular basis or alternatively move to more appropriate accommodation as their needs evolve over time.
We see no evidence to suggest that over the coming year the average hold period of properties selling won’t increase further.
SUBSCRIBE & DON'T MISS A SINGLE EPISODE OF MICHAEL YARDNEY'S PODCAST
Hear Michael & a select panel of guest experts discuss property investment, success & money related topics. Subscribe now, whether you're on an Apple or Android handset.
PREFER TO SUBSCRIBE VIA EMAIL?
Join Michael Yardney's inner circle of daily subscribers and get into the head of Australia's best property investment advisor and a wide team of leading property researchers and commentators.