- Australians are staying in their homes longer.
- Elevated housing costs part of the reason behind this trend.
- Profitable resales are on the rise across Australia
Australian homes are being held for longer but can enjoy higher profits when they finally sell, according to Domain’s inaugural Tenure and Profit report.
While reasons for holding on to a property can vary by location and property cycles, longer times between home buying and home selling can suggest affordability issues and inefficiencies in the housing market.
Profitable Australian home sales have also been on the rise, with the Domain figures showing profitable sales are well above 90%.
Why is tenure data important?
Tenure refers to the years that a property is held before being resold. According to Domain’s research, tenure has been growing in many cities, with people moving more infrequently.
Particularly for houses, the median tenure has increased from seven years in 2013 to nine years in 2023.
The median tenure length across Australia
| Area | Houses | Units | ||||||
| 2023 | 2022 | 2018 | 2013 | 2023 | 2022 | 2018 | 2013 | |
| Sydney | 10yrs | 9yrs | 9yrs | 8yrs | 8yrs | 8yrs | 6yrs | 6yrs |
| Melbourne | 9yrs | 9yrs | 9yrs | 8yrs | 9yrs | 9yrs | 8yrs | 8yrs |
| Brisbane | 9yrs | 9yrs | 9yrs | 8yrs | 7yrs | 7yrs | 8yrs | 6yrs |
| Adelaide | 9yrs | 9yrs | 8yrs | 7yrs | 8yrs | 8yrs | 9yrs | 7yrs |
| Perth | 10yrs | 9yrs | 9yrs | 7yrs | 9yrs | 9yrs | 10yrs | 7yrs |
| Canberra | 10yrs | 10yrs | 9yrs | 8yrs | 6yrs | 6yrs | 8yrs | 6yrs |
| Hobart | 7yrs | 7yrs | 7yrs | 6yrs | 7yrs | 6yrs | 7yrs | 5yrs |
| Darwin | 12yrs | 12yrs | 11yrs | 7yrs | 11yrs | 11yrs | 11yrs | 6yrs |
| Reg NSW | 8yrs | 8yrs | 8yrs | 7yrs | 7yrs | 7yrs | 7yrs | 7yrs |
| Reg Vic | 8yrs | 8yrs | 8yrs | 8yrs | 11yrs | 11yrs | 10yrs | 9yrs |
| Reg Qld | 9yrs | 10yrs | 9yrs | 7yrs | 7yrs | 7yrs | 8yrs | 7yrs |
| Reg SA | 9yrs | 10yrs | 9yrs | 7yrs | 9yrs | 10yrs | 9yrs | 7yrs |
| Reg WA | 10yrs | 10yrs | 10yrs | 7yrs | 10yrs | 9yrs | 8yrs | 7yrs |
| Reg Tas | 6yrs | 7yrs | 7yrs | 5yrs | 6yrs | 6yrs | 8yrs | 5yrs |
| Reg NT | 13yrs | 12yrs | 11yrs | 7yrs | 10yrs | 10yrs | 9yrs | 6yrs |
| Australia | 9yrs | 9yrs | 9yrs | 7yrs | 8yrs | 8yrs | 8yrs | 6yrs |
Source: Domain.
Affordability, demographic changes, and the stages of a property cycle can cause variances in tenure between areas and property types.
Sydney and Perth have seen the most regular tenure rises in houses, while Sydney and Melbourne experienced the most consistent tenure growth in terms of units.
Tenure also helps gauge market dynamics. Property price cycles can be a crucial driver of pushing tenure upwards or downwards, as homeowners will make selling decisions based on the potential profit they can gain depending on the length they hold a property.
The protracted tenure spotlights today’s continuing housing affordability issues, which have prevented Australians from moving to houses better suited to their needs. This has contributed to a rise in the inefficient use of housing stock and harmed housing mobility, lowering workforce mobility and productivity.
Australians are moving less frequently
Sydney had the most significant rise in tenure, which is unsurprising considering how costly housing is in the capital city.
“The lengthening tenure reflects the reality of significantly stretched and highly leveraged household budgets,” said Domain’s chief of research and economics, Dr Nicola Powell.
“Furthermore, when you consider the transactional costs associated with buying and selling a home, such as conveyancing and stamp duty, it’s no surprise that people are becoming more cautious, even if their current property doesn’t fully meet their lifestyle needs.”
“Our research also reveals a concerning trend: ‘stamp duty bracket creep,’ where more homes are falling into higher stamp duty rate categories. This contributes to the misallocation of housing stock. Notably, 65% of homes owned outright have two or more spare bedrooms, in stark contrast to 22% of privately rented dwellings.
“Additionally, it’s estimated that around 640,000 Australians are living in housing stress. This mismatch exacerbates the ongoing housing affordability crisis and hinders efforts to maximise the efficient use of our housing stock.”
Resale profits on the rise
Profit-making resales dominate most resales, with 97.8% of houses reselling at a profit, surpassing the historical average of 95.9% and 91.7% for units.
The proportion of profit and loss-making resales in 2023
| Area | Profit | Loss | Change in profit-making sales (percentage point) | ||
| 1yr | 5yrs | 10yrs | |||
| Sydney | 95.10% | 4.90% | -1.70% | -3.30% | -2.60% |
| Melbourne | 94.60% | 5.40% | -1.80% | -3.00% | -2.10% |
| Brisbane | 98.30% | 1.70% | 0.20% | 3.70% | 6.30% |
| Adelaide | 99.20% | 0.80% | 0.20% | 3.60% | 5.80% |
| Perth | 93.90% | 6.10% | 0.70% | 10.90% | -2.90% |
| Canberra | 99.40% | 0.60% | -0.20% | 3.60% | 2.50% |
| Hobart | 99.20% | 0.80% | -0.50% | -0.20% | 18.80% |
| Darwin | 84.90% | 15.10% | -3.20% | 0.10% | -14.20% |
| Reg NSW | 98.90% | 1.10% | -0.60% | 1.00% | 6.40% |
| Reg Vic | 99.30% | 0.70% | -0.50% | 1.60% | 3.30% |
| Reg Qld | 96.40% | 3.60% | 0.60% | 6.10% | 8.50% |
| Reg SA | 97.20% | 2.80% | 0.50% | 9.50% | 7.90% |
| Reg WA | 92.50% | 7.50% | 1.20% | 12.90% | 3.20% |
| Reg Tas | 99.10% | 0.90% | -0.50% | 6.70% | 22.90% |
| Reg NT | 92.80% | 7.20% | -0.50% | 0.70% | -4.40% |
| Australia | 96.30% | 3.70% | -0.30% | 2.00% | 2.00% |
Source: Domain.
Most capital cities observed a profit in resales over 2023. The smaller capitals, like Canberra, Adelaide, and Hobart, had the highest proportion of profitable resales.
Adelaide’s profit-making resales grew to almost every sale, with over 99% profitable resales, making it the sole city to post record house and unit prices.
Canberra, Hobart, regional Victoria, and regional Tasmania also observed profit-making resales of over 99%.
The median dollar profit/loss on resales
| Area | Houses | Units | ||||||
| 2023 | 2022 | 2018 | 2013 | 2023 | 2022 | 2018 | 2013 | |
| Sydney | $410,000 | $455,000 | $368,500 | $142,500 | $127,000 | $191,000 | $245,000 | $95,000 |
| Melbourne | $327,000 | $375,000 | $327,600 | $186,500 | $80,000 | $131,000 | $150,331 | $133,000 |
| Brisbane | $315,000 | $305,000 | $130,000 | $102,000 | $87,400 | $58,000 | $17,000 | $45,000 |
| Adelaide | $235,000 | $190,000 | $76,500 | $79,500 | $110,000 | $75,000 | $44,000 | $60,000 |
| Perth | $120,000 | $95,000 | $55,000 | $140,000 | $36,000 | $35,000 | $42,000 | $114,000 |
| Canberra | $409,550 | $463,500 | $211,000 | $181,000 | $150,000 | $134,500 | $45,000 | $87,000 |
| Hobart | $305,000 | $336,250 | $112,500 | $30,000 | $220,000 | $250,000 | $95,000 | $20,000 |
| Darwin | $145,000 | $175,500 | $116,807 | $297,500 | $0 | – $5,000 | $0 | $142,250 |
| Reg NSW | $285,000 | $285,000 | $138,528 | $65,000 | $192,500 | $195,000 | $94,000 | $31,550 |
| Reg Vic | $239,000 | $247,000 | $100,000 | $78,000 | $175,000 | $170,000 | $76,500 | $68,000 |
| Reg Qld | $190,750 | $172,910 | $90,000 | $63,500 | $159,000 | $33,000 | $48,000 | $0 |
| Reg SA | $110,000 | $73,000 | $24,000 | $35,000 | $90,000 | $57,500 | $15,750 | $15,000 |
| Reg WA | $90,000 | $70,000 | $10,000 | $89,500 | $50,000 | $45,100 | $0 | $60,000 |
| Reg Tas | $215,000 | $215,000 | $41,000 | $20,000 | $143,000 | $145,000 | $24,500 | $7,500 |
| Reg NT | $117,500 | $100,000 | $86,750 | $165,000 | $37,000 | $35,025 | $52,500 | $120,000 |
| Australia | $245,000 | $250,000 | $160,200 | $108,500 | $115,000 | $123,000 | $110,000 | $ 77,500 |
Source: Domain.
All capital cities and regional Australia experienced significant median gains in resales. Sydney had the largest median gain in houses at $410,000, followed by Canberra at $409,550 and Melbourne at $327,000.
On the other hand, Hobart had the greatest return on unit resales at $220,000, followed by regional New South Wales’ (NSW) $192,500, and regional Victoria’s $175,000.
Unit returns in the regional markets outpaced those in the capital cities in NSW, Victoria, and Queensland.
Gains for units in regional Victoria were nearly double of Melbourne’s. This was driven by major demographic changes in the regions since the pandemic, where there was an influx of migration into the regions, reflected by the price growth and heightened demand in lifestyle locations.
“Across Australia, property sellers have walked away with a significant dollar uplift compared to their initial purchase price. The proportion of profitable resales remains consistently high, a trend expected to continue as Australia’s housing market recovers,” said Powell.
“However, in certain localised areas, the landscape may appear different, as some motivated sellers might be more inclined to accept a loss against the backdrop of rising debt costs.
“In saying that, as prices continue to climb, the likelihood of this diminishes. The profitability is anticipated to remain strong, aligning with the ongoing price improvements, just in time for the spring selling season.”
