The latest data from CoreLogic confirms what I have been saying for years now that homeowners are hanging onto their properties for much longer than 10-15 years ago.
This level of immobility is consequently hindering the homeownership aspirations of first-time buyers by reducing the pool of available established homes.
Nationally, the average length of ownership of houses sits at 11.3 years, which is 3.8 years longer than in 2009. Apartment owners are staying put for 9.6 years, an increase of 2.9 years over the last decade.
These trends are disturbing, and to my way of thinking have been aggravated by the taxation roadblocks causing empty nesters (also called right sizers) to stay put in their redundant family homes. In Sydney, the average hold period for a house is 12.4 years and an even longer 12.5 years in Melbourne, according to CoreLogic.
Taking a deeper dive into the statistics, the council areas with the most extended average hold periods are in Melbourne, Sydney, and regional Queensland. Houses in Monash Victoria recoded the most prolonged average hold period at 17.1 years.
Time is ripe to rightsize
If you’re a potential right sizer considering a move, the timing couldn’t be better. In fact, with markets taking off around the country, if you don’t act now, you might have to wait for another property cycle that could be many years away to make a move.
In Brisbane, for example, my colleague Frank Ham who runs our offices in Kenmore and Toowong in the city’s west said, “Since the election and the two interest rate cuts in winter, groups at open for inspections at properties in Brisbane’s inner western suburbs have doubled.”
At the same time, with interest rates at all-time lows and buyer confidence significantly stronger than earlier this year with auction clearance rates in our major capital cities back up around 75%, there will be plenty of interest in your property. The only stumbling block might be the prohibitive stamp duty costs of shifting into a smaller property or a different location.
One possible remedy to get people moving would be a stamp duty tax break for last-home buyers aged over 70 seeking to downsize. Stamp duty-free property transactions for older Australians will not only free up older Australians to move to a new house but address current supply constraints that have cramped the plans of upgraders and first-time buyers.
However, this is a long-term solution for downsizers, and the excellent market opportunities now on offer might override the stamp duty considerations involved in rightsizing into a new property.
For an obligation- free appraisal of your home, contact your local Raine & Horne office today.