Australians are delaying moving to new homes due to concerns about housing affordability, high stamp duty costs, fears of not earning enough from selling their current homes, and the uncertainty of finding better alternatives.
This has led them to stay in homes that may not be the best fit for their needs.
In fact, a new report from Domain reveals that the median length of tenure for houses has risen from seven years in 2013 in Australia to nine years, and units from six years to eight over the same period, with different cities recording similar shifts.
Dr Nicola Powell, Chief of Research and Economics at Domain said that this will be a worrying trend for governments.
She further commented:
"It shows that people might not be moving as often to homes that meet their needs, with empty-nesters staying in oversized homes and not releasing them for young families who need them.
Also, young couples might be trying to buy homes with more bedrooms than they need today in the prospect of, at some time in the future, having children. Further, it means the workforce is likely to be a whole lot less mobile.”
The length of home tenure in all capital cities is trending longer
Based on Domain's data, in both Sydney and Canberra, people are staying in houses now for an average of 10 years, up from eight years in 2013, in Melbourne and Brisbane for nine years, up from eight and in Perth for 10 years, up from seven.
Meanwhile, the shortest house tenure is in Hobart, at seven years, up from six, and the longest is in Darwin, now at 12 years, up an astonishing five years from seven in 2013.
Obviously, many people are seeking out their stay in unsuitable houses by renovating them and often extending them, in order to stay longer in their homes.
According to the Domain research paper, Tenure and Profit, does show, however, that a longer tenure usually leads to selling for a bigger profit, especially in a market where values are rising.
Based on its data, nationally, homeowners are making a median profit of $245,000 when they resell but in Sydney, the median profit is a massive $410,000.
What can homeowners do?
“People tend to get caught up in property price cycles when they should be looking at the longer term where most dwellings sell for a profit.
Logically, the longer someone stays in one home, then the more profit they will generally make.
Some people have strong emotional ties to their homes, but we have to ask, are we creating the right types of dwellings in the right areas and enabling people to downsize and stay in their preferred location.
The next generation needs some of these big family homes and that really speaks to the housing crisis.”
