‘We’re not a nation of houseflippers’: Kiwis holding onto homes longer
New Zealand isn’t a nation of houseflippers, new research suggests. Analysis of New Zealand property sales over the last 12 years has found that the median hold period in New Zealand - i.e. the amount of time a property is held before it is resold - has jumped almost one-and-half years. According Oneroof’s data partner, Valocity, the current median hold figure of 6.9 years is the highest it’s been in four years.
“Despite what people might read, Kiwi home-owners are not out there selling a house every three months and leveraging their way up the ladder. Most Kiwis are buying houses to live in. We’re not a nation of houseflippers,” said James Wilson, Valocity’s head of valuations.
The length of time people held onto their homes varied across the country, but not by much. The median hold period in Wellington was highest, at just over seven-and-a-half years, while the median hold period in Waikato was lowest, at just over six years. Auckland’s current median hold period is 7.2 years, while Canterbury’s, Otago’s and Bay of Plenty’s were on par with the national median.
The research found that while nationwide median hold period peaked in 2015 at 7.7 years and dropped down to 6.5 years at the end of 2020. Wilson said that the figures suggested the post-covid housing market boom had had an impact on hold periods. “You can definitely see a correlation
between the surge in property values and the reduction in holding periods. The creation of more equity allowed people to consider moving sooner.” Nationally, the shortest holding period was just 5.6 years in 2010 rising to 7.7 years in 2015 before declining in 2016 when house prices rose 12.5% in 2016 and 13.6% in 2017 as people looked to capitalise on their gains. Wilson believed people were selling houses sooner in Hamilton than anywhere else because of how popular the city had become with investors, who tended to sell properties within a shorter time-frame compared to owner-occupiers.
On the other hand, Wellington was late to the party and investors and firsthome owners only started competing against each other in the second half of the boom period, he said. Wilson expects the holding period to increase in the coming years as people “hunkered down” to cope with rising interest rates, rising inflation and softening house prices.
“They will cut costs elsewhere, but Kiwis are very good at continuing to pay the mortgage ultimately and what that typically means is with less equity in the properties going up and less confidence overall in future value growth people sit tight for longer. So yes, we would expect to see in the coming years the average holding period at the very least holding its own but in most locations you should expect to see that increase.”