How long do homeowners keep ahold of their homes?
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The median “hold period” for a New Zealand property has driven down to 7.4 years, compared to the peak 8.2 in 2016 and trough 3.8 in 2007, according to analytics firm CoreLogic.
Prompted by the relatively quiet residential property market, CoreLogic said it analysed residential properties that were resold over the quarter to see whether that has borne any relation to hold periods. It suggests that hold periods by buyer group remained stable up to 2015, with first home buyers and movers, who have resold, staying in their properties for shorter periods. Investors have not seen the same dip.
In Auckland, the hold period was shorter than the rest of New Zealand, while first home buyers also tended to hold properties for less time than multiple property owners (i.e. investors). However, Auckland’s hold period has started to rise again in the past few quarters compared to the downward trend over the past 2-3 years
“One theory here could be that the high prices for property in Auckland have made it harder for FHBs to move on, whereas the same group elsewhere around the country have managed to trade up a bit more easily,” CoreLogic senior property economist Kelvin Davidson explained.
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“So what does this all mean? There are many possible implications, but perhaps the most obvious is that shorter hold periods in the past few years suggest more sales activity than otherwise would have occurred, as well as a rise in mortgaging/re-mortgaging opportunities for the banks (especially in Auckland, where hold periods are shorter than nationally, as well as for FHBs in general),” he added.
