However, despite more people and property in Australia, housing turnover levels are not — they’re falling in most of Australia’s capitals.
This chart from CoreLogic shows monthly housing turnover levels across Australia in the past two decades. The group has used a 6-month moving average to better demonstrate the trend seen over that period.
While there has been some modest movement over that period in either direction, it’s essentially been flat from the levels seen two decades ago.
So what gives? Why are housing turnover levels static despite more people and property now existing in Australia?
According to Cameron Kusher, research analyst at CoreLogic, it comes down to “inefficiencies in the housing market”.
“This is likely due to a number of reasons including the impost of stamp duty which discourages transactions, higher prices which lead to greater commission on sales and no real incentives for people to downsize homes when their children leave or they reach retirement,” he said in a note released today.
“These inefficiencies also have an economic impact as the high cost of exiting and entering the housing market is likely to impact on labour mobility as home owners may choose not to move for employment because of these high costs.”
According to research released by Australia’s Housing Industry Association (HIA) today, the average stamp duty bill paid by an Australian owner-occupier increased by 16.4% to $20,725 over the past 12 months.
And that’s nationally with the average cost in Sydney and Melbourne — Australia’s most expensive housing markets where just under 40% of Australia’s population live — substantially higher at $29,105 and $26,870 respectively.
The median dwelling prices in both those cities has more than doubled since the start of 2009, according to CoreLogic.
This is not only exacerbating housing affordability constraints in those cities, contributing to lower housing turnover levels, but also contributes to higher stamp duty costs, which, as Kusher suggests, provides a disincentive for families, couples and individuals to move to more appropriate housing for their circumstances.
Despite the reluctance of state governments to forego this revenue cash cow, there’s surely a case to reduce transnational costs to encourage more mobility in the housing market.