Don’t let property plans hibernate over winter

COVID-19 restrictions saw enforced market activity slumps across much of Australia in 2020.

While these dips in market activity were unforeseen, the quiet period through mid-winter has been a regular feature of the real estate market across much of Southern Australia for decades.

With winter upon us, it’s worth considering your property investment strategy over the quieter months ahead, so you’re well prepared once activity ramps up in the warmer months.

In June and July, auction volumes across Australia have typically been below half that seen in autumn and just a third of the numbers reported in the peak selling season, which is October through to early December.

That’s understandable. Properties – especially houses with gardens – present better outside winter. And many prospective buyers prefer to undertake a campaign in warmer weather. 

However, it is a mistake to close one’s mind to property entirely in winter, especially if you are thinking of selling this spring. The reason lies in the annual cycle referred to above. 

Auction clearance rates are often stronger at the start of spring than in early summer. Invariably what occurs is that demand bounces back quickly after the winter break. 

Buyers, starved of supply over winter and keen to get a deal done, are plentiful - particularly this year amid the strong rebound in demand we’ve seen across much of the country after the initial COVID-19 related dips in 2020.

Traditionally supply over the cooler months builds slowly; many vendors don’t decide to list until spring has almost arrived, and there is of course a lag between instructing an agent to list a property and when it sells.

As an aside, this downward path in auction clearance rates over several weeks over spring can result in many commentators and journalists mistakenly claiming that the property market has peaked and the bad times are coming. The regularity of this error is as predictable as it is dispiriting.

The lag between buyers stirring and vendors responding presents a great opportunity for the early bird vendor. 

Listing in August and early September can be fruitful, both in terms of a greater likelihood of wrapping up a campaign quickly and also achieving a strong price. 

In a perfect world, one would expect every agent and vendor to become wise to this kink.  Agents certainly are. 

But it persists because one, many top agents take the opportunity to wind down in July – so appreciate the lull; and two, despite the best efforts of their colleagues who remain, vendors are slow out of the traps.

In short, this means vendors who want to list in late winter or early spring should initiate the process early. It takes a couple of weeks to prepare and then whittle down the short list of estate agents to one. Advertising has to be booked and copy written.

And, in all likelihood, the property has to be de-cluttered and perhaps given a little bit of love and attention before photographs are taken and strangers allowed in to imagine themselves living there.

If the thought of this effort has you reaching for the snooze button so you can hide under the doona until spring, here’s another incentive for going now.

If you’re selling one property, you’re likely to be buying a replacement thereafter. Vendors who complete the sale-side of this two-step process early in spring are usually faced with an enviable situation.  They have the rest of spring and early summer to find a new home, during a period of strong supply.  

If things go really well; they’ve sold, bought and moved into their new property before Christmas; and are ready to relax and enjoy the summer holidays ahead.