New analysis from the Real Estate Institute of Western Australia indicates that Western Australians are moving house less frequently than they used to.
A comparison of figures between the periods of 1990-91 and 2013-14, showed that as dwelling stock across the state increased from 586,000 to 992,000, the average turnover time increased from 14 to 21 years.
REIWA President David Airey said this suggested that owners and investors are holding onto property for longer, which debunks the long held myth that home owners move an average of every seven years.
“The peak turnover rate of 11 years occurred in 2005-2006, at the height of the property boom and record turnover.
“Conversely, the longest turnover period of 25 years occurred in 2010-2011 as markets across WA recorded weak turnover levels not seen since the recession in the early 1990s,” Mr Airey said.
Further analysis at sub-region and region level produced varying results across the state, with the Perth metro area’s turnover climbing from 14 to 19 years, which was not as significant as the overall state figure.
“If we break this down to the types of dwellings, we find that owners of multi-residential property, such as units, apartments, villas and townhouses, have traditionally held property for longer and continue to do so.
“This is probably influenced by the fact that around half of all multi-residential stock is owned by investors. Around 22 per cent of Perth’s dwelling stock is multi-residential and our research shows ownership of this stock has stretched from 16 to 23 years since 1990,” Mr Airey said.
Perth metro
At sub-region level within the Perth metro area, results were much more varied.
In the central sub-region (roughly a 10 kilometre radius from the CBD), data showed that this zone held 59 per cent of all dwelling stock in the 1990s, but had dropped back to 47 per cent, while the average turnover moved slightly from 15 to 19 years.
Higher turnover rates were found through the northeast region of Perth, which includes Swan, Mundaring and Kalamunda. In this region, the ownership period stretched from 14 to 21 years, which is the longest rate in the Perth metro area.
Perth’s southeast sub-region saw more rapid turnover through Gosnells, Armadale and Serpentine-Jarrahdale.
“This is probably indicative of the larger number of first home buyers and investors, and possibly also the higher number of forced sales resulting from the recession in the early 1990s.
“These factors may also have influenced the northwest sub-region through Joondalup and Wanneroo, where the holding time went from a low of 13 years to 19 years during the period of this study,” Mr Airey said.
Perth’s southwest region, through Cockburn, Kwinana and Rockingham, saw turnover rates shift from 14 to 18 years.
Regional WA
In Regional WA, turnover times were more highly variable as a result of changing economic fortunes, population growth, investment trends and lifestyle choices which ebb and flow around the state.
“In the Peel region, including Mandurah, the high level of turnover once associated with discretionary holiday homes has given way to levels now comparable to Perth as its population has grown.
“It looks similar through the South West and Great Southern, with an upward trend in turnover time more reflective of lifestyle living choices, while in the Wheatbelt, the holding time has stretched out to 42 years as rural communities decline,” Mr Airey said.
Through the mid-west, the mix of rural and holiday settlements beyond Geraldton has influenced more recent turnover rates, while in the Gascoyne, lower sales activity after the Global Financial Crisis in 2008 blew out the turnover rate.
The Pilbara saw little change between 1990-91 and 2013-14, and there was an extended period between 1995 and 2010 where average turnover periods levelled at 20 years.
In the Kimberley, low turnover in sparsely populated and small communities resulted in turnover rates similar to those found in the Wheatbelt.
Source: aussiehome.com