Australians are Holding Onto Their Homes Longer
Announcement posted by Origin Projects - Land & New Homes in WA 20 Mar 2013
Developer of house and land packages in Perth reveals why the market for established homes remains sluggish and how savvy buyers can work around it.
Perth, March 20, 2013
According to a recent survey, which covered properties sold in 2012, Australian homeowners are holding off on selling their home for longer than at any previous point in recent history. Of all properties sold in 2012, the average holding period was 9.3 years for houses, compared to 8.2 years for units. In comparison, the average holding period for houses sold in 2002 was 6.8 years for houses, compared to 5.9 years for units.
These numbers constitute an approximate 25% rise in the amount of time Australian homeowners currently hold onto their homes before selling them. The most popular reason cited is that homeowners are waiting for their property values to rebound back to the levels they had attained during the real estate boom of the mid-2000’s.
Melbourne was the capital city with the longest average holding period, at nearly 11 years. The shortest holding period for houses was Port Hedland in WA, at 4.4 years. The shortest holding period for units was Welpa in Far North Queensland, at 3.4 years.
While many homeowners are waiting for prices to rise further, the high median prices for homes in the capital cities were cited as a major disincentive for market movement. The median price in Perth was $465,000, the median price in Brisbane was $420,000, the median price in Sydney was $540,000, and the median price in Melbourne was $482,000. In Victoria, the factor most often cited as a disincentive for buying or selling is extremely high stamp duty.
Before the global financial crisis, Australia, along with much of the English speaking world, was experiencing a real estate boom. Prices were at all-time highs, and real estate “flipping” was a hot trend among professional and amateur investors alike.
In addition, loans were easier to obtain, and investors borrowed as much money as possible on homes, while investing as little money as possible. Aspiring property-flippers were also supported by rising property values, which made loans look much more secure on paper than they would soon turn out to be.
When the global financial crisis hit, property values fell, and the net result was that many property owners had “negative equity” in their mortgages, owing more money than the properties were worth. Consequently, many property owners have been forced to bide their time as they build equity while waiting for prices to once again reach their previous high water marks.
According to Lauren O’Connor, Marketing Manager for 4Land Property Group, the news isn’t all bad: “On the surface, the fact that so many people are holding onto their established homes would appear to be bad news for those looking to buy a home. Indeed, the combination of high median prices and low availability in the Perth area has contributed to a sluggish market for established homes.”
O’Connor continued: “Luckily, established homes are not the only option for prospective home buyers. At 4Land Property Group, we have house and land packages for new homes available for often less than the median price for a home in Perth.”
O’Connor concluded, “Visit one of our display homes in the Perth area; buying a great home for a great price in a great community may be easier than you think.”
4Land Property Group is a development group that sells house and land packages in planned communities in the Perth area. For more information call (08) 9301 4445 or visit their company website: http://www.4land.com.au/
According to a recent survey, which covered properties sold in 2012, Australian homeowners are holding off on selling their home for longer than at any previous point in recent history. Of all properties sold in 2012, the average holding period was 9.3 years for houses, compared to 8.2 years for units. In comparison, the average holding period for houses sold in 2002 was 6.8 years for houses, compared to 5.9 years for units.
These numbers constitute an approximate 25% rise in the amount of time Australian homeowners currently hold onto their homes before selling them. The most popular reason cited is that homeowners are waiting for their property values to rebound back to the levels they had attained during the real estate boom of the mid-2000’s.
Melbourne was the capital city with the longest average holding period, at nearly 11 years. The shortest holding period for houses was Port Hedland in WA, at 4.4 years. The shortest holding period for units was Welpa in Far North Queensland, at 3.4 years.
While many homeowners are waiting for prices to rise further, the high median prices for homes in the capital cities were cited as a major disincentive for market movement. The median price in Perth was $465,000, the median price in Brisbane was $420,000, the median price in Sydney was $540,000, and the median price in Melbourne was $482,000. In Victoria, the factor most often cited as a disincentive for buying or selling is extremely high stamp duty.
Before the global financial crisis, Australia, along with much of the English speaking world, was experiencing a real estate boom. Prices were at all-time highs, and real estate “flipping” was a hot trend among professional and amateur investors alike.
In addition, loans were easier to obtain, and investors borrowed as much money as possible on homes, while investing as little money as possible. Aspiring property-flippers were also supported by rising property values, which made loans look much more secure on paper than they would soon turn out to be.
When the global financial crisis hit, property values fell, and the net result was that many property owners had “negative equity” in their mortgages, owing more money than the properties were worth. Consequently, many property owners have been forced to bide their time as they build equity while waiting for prices to once again reach their previous high water marks.
According to Lauren O’Connor, Marketing Manager for 4Land Property Group, the news isn’t all bad: “On the surface, the fact that so many people are holding onto their established homes would appear to be bad news for those looking to buy a home. Indeed, the combination of high median prices and low availability in the Perth area has contributed to a sluggish market for established homes.”
O’Connor continued: “Luckily, established homes are not the only option for prospective home buyers. At 4Land Property Group, we have house and land packages for new homes available for often less than the median price for a home in Perth.”
O’Connor concluded, “Visit one of our display homes in the Perth area; buying a great home for a great price in a great community may be easier than you think.”
4Land Property Group is a development group that sells house and land packages in planned communities in the Perth area. For more information call (08) 9301 4445 or visit their company website: http://www.4land.com.au/