Is it time to move house?
Despite the growing value of real estate throughout Australia, it seems like there are only a few owner-occupiers who are choosing to take advantage of it in the current Australian property market.
According to a recent survey from Roy Morgan, the majority of people have stayed in the same home for at least the last five years, with over 40 per cent of people being at the same address for at least a decade. People don’t quite seem to be sold on the idea of moving home, but let’s say you are in the minority: How do you know it’s the right time?
The financial directive
Your current property may already be giving you the opportunity to move through equity gains.
Whether you are thinking of moving out of your first home into something larger or are downsizing after retirement, there’s one consistent fact: moving can be stressful, both psychologically and financially. It would be great if we could pick where we wanted to live based purely on personal preference, but the reality is that your finances and equity have to be in solid shape if you want to up sticks and head out.
Thankfully, your current property may already be giving you the opportunity to move through equity gains. If you are one of those people who have chosen to stick around in the same home for a while, you might be surprised by how much your value has grown – particularly in the rapid-increase environment Australia is currently in.
Is the change worth the price?
If you’ve been at the same address for the last 10 years, you are more likely to be able to sell your current home for more than you paid for it, according to the CoreLogic RP Data Pain and Gain report. If it’s an apartment you’re in, you can get away with a little bit of a shorter period, but in general a decade is the hold period to aim for. Patience is a virtue in so many things, and it appears that property is no different.
How does this affect your moving intentions? By accessing this equity, whether through sale or refinancing, you may find that you don’t have to spend quite so long saving for a deposit as you thought. You might even have some left over to upgrade your new home, or perhaps even indulge in a quick holiday.
Moving due to schools
Patience is a virtue in so many things, and it appears that property is no different.
One popular reason for moving is to get children into a more prestigious school zone. However, you might be surprised by the premium you are expected to pay in order to do so. The Real Estate Institute of Victoria (REIV), for example, found that Melbourne suburbs that were located within the school zone of a top-performing public school had a $1.4million median price tag. Schools just outside of this area were almost $600,000 cheaper.
Of course, the school location would not be the only factor dictating housing prices; proximity to amenities, neighbourhood reputation or even a particular area being “fashionable” could be enough for it to command a particularly impressive price. Are you moving to be closer to work? Nearer a school? To a popular retirement spot? These could all increase the price you need to pay, and should be a major consideration in the feasibility of moving home.
Ultimately, the question of whether it’s the right time to move home comes down to one thing: Is the change worth the price? Shifting home can be stressful, but the rewards can be well worth it. A local school for young families, a larger home for those with a child on the way, a more manageable floor space for downsizers – there are plenty of reasons to move home, but make sure you get the right advice from a local real estate agent to ensure the decision is the correct one.