The length of time Australians stay put in their homes depends on many factors. Generally, it’s dictated by major life changes such as getting married, having children, downsizing for retirement and changing jobs or being transferred. There’s also our continual pursuit of the ‘dream house’ with most people having a favoured location and property type in mind for the future, such as a luxury apartment on the beach.
Right now we have a lot of upgraders in the marketplace looking for larger homes to accommodate their growing families or similar-sized homes in better lifestyle locations. Downsizers are also active particularly in the apartment market in coastal suburbs.
Across Australia, the average length of time we stay in each property we own is 7.5 years for houses and 6.5 years for apartments, according to independent data supplier, RP Data.
The numbers differ suburb to suburb and I’ll get into that in a minute as it’s fascinating stuff. But looking at it from a national point of view, we’re seeing the longest periods of tenure in desirable well-established suburbs close to the water and CBD in Melbourne and Sydney (9.6 years for houses, eight years apartments and 9.1 years for houses, 7.4 years for apartments respectively).
Property prices in these cities have been comparatively high for a long period of time and the costs of selling – including stamp duty, plus the costs of moving – are probably keeping more people in their homes for longer in these cities. However, Darwin is also an expensive market – in fact, it’s our fourth most expensive capital, yet it has the shortest average period of tenure (4.7 years for houses, four years for apartments).
The difference between Sydney/Melbourne and Darwin is that Darwin has been experiencing a phenomenal property boom over the past five years and during extended booms people tend to buy and sell within a shorter time period when rapid and substantial capital gains are available.
I’ll digress here to say I don’t recommend this, as the best capital gains are always reaped over the long term. Plus, the costs of moving (including stamp duty on your sale) these days are too high to make short-term holding financially viable. Looking at historical averages, property prices tend to double every 10 years but this doesn’t happen on a consistent year-on-year basis. We’ll have five per cent growth one year, 15 per cent the next, and so on depending on interest rates, the economy, development and government policies.
If you need more space but you like the location you’re in, I definitely recommend renovating or extending if you can as it’s far less costly than moving. Don’t have the money to renovate? Well, most of us don’t have tens of thousands of dollars lying around either! However, you could probably access the equity in your home to fund those renovations – this is really easy for your broker or bank to organise.
But back to looking at the tenure stats. On a suburb-by-suburb basis, it seems the residents of Ivanhoe East in Melbourne are very happy to stay put with the average tenure being 16 years – the longest average tenure of any capital city in Australia. The median house price in Ivanhoe East has increased from $250,000 to $1.25 million in that time – hence it’s doubled more than twice in well under 20 years!
The suburbs with the shortest average tenure (just 1.7 years) are outer ring suburbs dominated by new housing in Burnside Heights in Melbourne’s Melton region and Berrinba in Brisbane’s Logan area.
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