Fees hit sales, econ­omy

The Weekend Post - Real Estate - - Real Estate -

RE­CENT re­search has re­vealed we are not sell­ing up as of­ten as we did.

This data does not il­lus­trate slight in­creases, but a dra­matic turn­around. In the past 10 years, hold pe­ri­ods for homes have in­creased 38 per cent in Mel­bourne, and up to 110 per cent in Dar­win.

Trav­el­ling around Australia in more re­cent years I have be­come aware that we just seem to be stay­ing put longer. Has mov­ing house be­come less fash­ion­able or are there other forces at play here?

For many, the lack of moves was likely not through choice.

Weak sales mar­kets in many parts of Australia over the past decade have meant many home­own­ers have not been able to sell and move on. That may be due to a re­duc­tion in buyer de­mand in that area, or an in­abil­ity to achieve a sale value in line with ven­dor ex­pec­ta­tions; or in many cases not even be­ing able to achieve a fig­ure that equates to what was paid at the time of pur­chase.

For oth­ers, I be­lieve the sharp in­crease in re­lated buy­ing and sell­ing costs have played a part in the trend.

First, the in­crease in house prices, although good for home­own­ers, has meant per­cent­age-based real es­tate agent fees have in­creased dis­pro­por­tion­ately to other house­hold and life­style costs, even for the most mod­est home.

Sec­ond – and this is the real sting in the tail – stamp duty, that sneaky tax that was in­tro­duced many years ago and was once a fairly in­signif­i­cant fig­ure, is now equal to a de­cent fam­ily car and, in many cases, a whole fleet of them.

Mov­ing house is great for our over­all econ­omy, from re­moval and stor­age costs, to pro­fes­sional ser­vices and not for­get­ting re­tail – we move house, we hit the shops, we buy an ex­tra cof­fee dur­ing all this shop­ping and have a meal out to cel­e­brate our move.

It’s a real win-win, so per­haps if any of our in­spired po­lit­i­cal lead­ers are read­ing this, may I sug­gest a stamp duty re­view to keep us mov­ing?

I don’t think our pas­sion for mov­ing has waned, but the above fac­tors have led to quite a sub­stan­tial change to our res­i­den­tial hous­ing mar­ket.

In our three largest cities, this isn’t a slight change, but a dra­matic shift.

Syd­ney has changed from typ­i­cal home own­er­ship of just over seven years to well over 11; the same in Mel­bourne. Ten years ago in Dar­win it was only three years be­fore the sale board went up out­side the typ­i­cal home, but now it’s more than dou­ble that time.

Per­cent­age-wise they are as­ton­ish­ing statis­tics and per­haps a po­lite nod to real es­tate agents and the gov­ern­ment that charges may need to be given a lit­tle re­view?

It can be rea­son­ably ar­gued that if the prop­erty own­er­ship terms con­tin­ued to grow at the rate seen over the past decade, in just 10 years the av­er­age home across Australia’s will have a hold pe­riod of about 20 years. That’s not great for our econ­omy.

Nat­u­rally, per­haps charges will be ad­justed to fairer lev­els at some point due to mar­ket forces.

As mar­kets im­prove, sell­ing be­comes eas­ier and low in­ter­est rates are mak­ing the trade-up seem more vi­able.

Th­ese el­e­ments may help re­strain the dra­matic swing of the past decade, but the limited es­tab­lished home stock will also make buy­ing an es­tab­lished home even harder if noth­ing changes.

Newspapers in English

Newspapers from Australia

© PressReader. All rights reserved.