Homeowners in Australia’s most tightly-held suburbs are in for the long haul, and not even soaring prices can tempt them to leave.
Analysis of PropTrack data has revealed the sought-after suburbs around the country where homeowners typically hold onto properties for decades.
In these sought-after suburbs, residents become deeply rooted and remain in place for much longer than average.
With typical tenures of more than 20 years, homeowners are happy to hold on for the long term, even though Australia’s long-running price growth means sizeable gains are on offer for those that do sell.
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REA Group senior economist Anne Flaherty said the suburbs with the longest hold times were often in well-established areas that appealed to a range of different demographics.
“Suburbs that meet the needs of people at different life stages are likely to have a longer hold period,” she said.
The suburbs where people buy and never want to leave
Many suburbs with long hold times for houses – which were mostly found in the middle-ring suburbs of Australia’s largest capitals – appeal to both young and established families, with access to desirable schooling being a major factor.
Mont Albert's leafy streets attract buyers looking for 'forever homes' near top schools. Picture: realestate.com.au/sold
The suburb with the longest average hold time for houses was Clarinda in Melbourne’s south east, where homeowners hold onto a property for 23 years on average.
Houses in Mont Albert in Melbourne’s inner east were typically held for 21 years, while Upper Ferntree Gully in the outer east had an average hold time of almost 20 years.
Real estate agent and auctioneer Tim Heavyside said buyers in Mont Albert were drawn to the suburb’s period family homes, leafy streets, proximity to well-regarded private schools and convenient access to the city.
“It’s a suburb that a lot of people aspire to live in, and a place where people find their forever home,” he said.
Family buyers tended to stay throughout schooling years and beyond, he said.
“Often I get the privilege to sell homes that people have been in for 40, 50 or even 60 years.”
Several inner and middle-ring suburbs of Sydney had hold times of about 20 years, including Hurlstone Park, Bexley North and Dulwich Hill.
Homeowners in Dulwich Hill stay for two decades on average. Picture: realestate.com.au/sold
Median ages and the proportion of owner-occupiers in the most tightly-held suburbs tend to be higher than at the national level, according to Australian Bureau of Statistics figures.
Suburbs with homes and amenities suitable to older people can allow residents to age in place, while family and community connections mean there is little reason to leave.
Prices were often higher in these suburbs too, which could act as a barrier to entry to younger buyers trying to get into the market, Ms Flaherty said.
“From an affordability perspective, especially when looking at houses, you're going to see the figures are older-skewed because it's more difficult to get into these areas,” she said.
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Higher home values in the most tightly-held suburbs could also contribute towards lower housing turnover, Ms Flaherty said, with homeowners potentially deterred from moving by big stamp duty bills on their next purchase.
“In more expensive suburbs, the stamp duty cost is so much higher that you have a much greater incentive to hold that property for longer, because it’s a big financial penalty every time you move,” she said.
“In some of these suburbs, the amount you'd be paying would be a really strong incentive to stay in that property longer.”
The most tightly-held suburbs for units were more likely to be found in higher-value inner city areas.
“Most of those are exclusive suburbs that have very high liveability.” Ms Flaherty said.
“They’re suburbs people aspire to be in because they have great amenity and they’re relatively easy distances from CBDs.”
Cremorne Point has the nation's longest average hold time for units at 18 years. This four-bedroom apartment in the suburb sold for $8.55 million in April. Picture: realestate.com.au/sold
Cremorne Point (18 years) and Waverton (17 years) on Sydney’s lower north shore had the nation's longest average hold times for units.
Belle Property Neutral Bay principal Matthew Smythe said most apartment owners in Cremorne Point were either older people who had downsized from a larger home, or executive couples seeking proximity to the city.
“You feel like you’re on holidays when you live there,” he said. “It has arguably one of the best views of Sydney, and one of the most picturesque walkways in the world which is fantastic for a morning walk.”
“The ferry has zero stops to the city. You can be there in 10 minutes having dinner in some of the best restaurants in the country or watching a show at the Opera House. Once people have experienced that, it becomes very addictive.”
Meanwhile, East Melbourne, Middle Park, Black Rock and Caulfield in Melbourne’s east all had hold times of about 16 years.
Homes in Sydney and Melbourne tended to have the longest hold times while properties in Darwin and Hobart were typically held for shorter periods, the data shows.
Ms Flaherty said this was partly due to the economic benefits of living in a larger city.
“Sydney and Melbourne are the two largest capital cities in the country with very diverse well-established large economies,” she said. “People can stay and live in those areas for a greater period of time.”
Higher property prices means buyers faced bigger transaction costs from soaring stamp duty bills when selling.
“In Sydney the financial penalty of selling and moving to a different property is much higher.”
Suburbs where properties change hands quickly
The data shows there are many suburbs across Australia where homeowners typically only stay for a couple of years before trading up or moving on.
These suburbs are often found in outer areas of the capitals or regional cities, and typically have a very high proportion of newly built homes.
“A lot of these are brand new suburbs or areas where there's been huge new house and land developments in recent years,” Ms Flaherty said.
More affordable property prices in these developing suburbs meant buyers were often first-time purchasers taking their first step on the property ladder.
“A lot of them are also very far away from capital cities so for some people it might be where they purchase their first house, and then once they can afford to, they'll move somewhere else.”
Many newly developed suburbs such as Nirimba on the Sunshine Coast have shorter holding periods, with some first-home buyers and investors selling within a few years of buying. Picture: realestate.com.au/sold
Suburbs with average hold times of less than three years included Bells Creek and Nirimba on the Sunshine Coast and Donnybrook and Thornhill Park on Melbourne’s outskirts.
Real estate agent Adeel Obaid of Area Specialist Melton said most people purchasing in Thornhill Park were first-home buyers who viewed the suburb as a stepping stone towards their next purchase.
“Once the amenities are there and freeway access is improved, people will stay longer,” he said.
While most suburbs had longer average hold times compared to five years ago, homes in about 40% of Australian suburbs are now held for shorter periods, the data shows.
Hold times have reduced over the past five years in previously tightly-held suburbs such as St Johns Park in western Sydney (down 34%), Mount Gravatt in Brisbane (down 29%) and Ivanhoe East in Melbourne (down 8%), indicating some property owners may be open to moving more often.
Tax changes could encourage homeowners to stay for longer
Ms Flaherty said recent changes to property tax introduced in the federal budget could encourage homeowners and investors to hold onto properties for longer.
Under the new rules, negative gearing will be abolished for established properties, while the 50% capital gains tax discount would be replaced with an inflation-indexation model.
However, negative gearing changes will be grandfathered, meaning existing owners of established properties can still claim the tax break on rental losses.
“It’s a very strong incentive for current property owners to not sell that property so they have the option of grandfathering benefits,” Ms Flaherty said.
Higher taxes for capital gains would encourage investors to keep properties for longer, she added.
“You’re paying a higher amount of tax on capital gains so you may want to hold that property longer so you do get more gain at the end of the day.”
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