When is the best time to buy or sell a property? People have mixed opinions on this and often toss up whether to follow their gut feel or take a more research driven approach to the market. It can also be easy to be influenced by the varying opinion of others, so it is important to be familiar with some simple concepts and statistics.
With the warmer weather also comes a hotter property market as we move into Spring. During this time of year, the usual winter lull is dusted off as new properties and buyers begin to join the market.
The term ‘Spring buying season’ relates to Spring being considered the busiest time of year for the real-estate market in Australia, with some states seeing 40% of properties sold per year within this period.
But why is Spring so popular? It’s actually simpler than you might think. Buyers rejoice with a wider selection of properties on the market, whilst sellers can enjoy increased attendance at home opens.
So what causes this ‘buy and sell’ behaviour? As the rain starts to dry up, homes become more visually appealing as gardens become lusher and outdoor entertainment features become more vibrant. With the better weather, buyers become motivated to attend home opens, making the period busier as sellers take advantage of these conditions to present their home in the best light.
In addition, as outdoor spaces become more appealing, buyers seem to have a greater desire to settle pre-summer. This can be helpful for sellers who want a quick settlement on the property, especially if they need the capital to make their next purchase. The changes to climate also tend to result in a fairly well maintained market inventory while buyers become increasingly competitive. Further to this, increased competition from buyers breeds an appetite to price more competitively which can be heightened by a limited supply of real estate inventory.
This seasonal increase in housing market activity is backed up by 2016 figures from Core Logic. Across all eight capital cities, there were more property listings and sales throughout the Spring months of September, October and November as compared to Summer, Winter and Autumn. Furthermore, in all capital cities except for Darwin and Adelaide, house prices also jumped during those months.
Spring-time 2016 in Sydney saw 35,055 listings, which led to 14,925 sales and a median house price of $990,000. When comparing this to winter 2016 and summer 2017, buyers were able to secure cheaper house prices with the lull in activity, lowering the median house price of sales to $890,000 and $906,000, respectively.
According to REIWA, WA first home buyers were in full force last Spring, with half of all transactions over the 3 month period occurring in the lower end of the market. Houses priced at less than $500,000 saw sales lift by 12% over the previous June quarter of 2016. The Spring season in Perth saw the number of properties listed for sale sit at 14,000, above the long-term average.
Quarterly change in dwelling values moving into the Spring buying season:
(Source: Core Logic)
As we move into the Spring buying season, dwelling values have increased on average across the nation with Melbourne and Hobart showing strong growth. Sellers on the east coast can take advantage of these higher values whilst buyers on the west coast could leverage greater negotiating power as a result of decreasing sale prices.
According to Core Logic, the season appears to be experiencing a slow start in capital cities with the number of houses being listed on the market increasing 0.3%. This is however, still a move in the right direction.
Perth has had some more accelerated growth in listings numbers heading into the Spring buying season. Over the last week starting 19th September, sales activity was on the climb with activity in Perth increasing by 4% and the number of listings increasing by 1%. This is most likely due to buyers taking advantage of falling dwelling values alongside competitive interest rates, according to REIWA.