Properties sell quicker in spring, so what should investors do?

Spring is often heralded as a season of renewal and growth, and for many Australian property investors, springtime brings a prime opportunity to either get a foothold on the real estate ladder or to expand your property portfolio.

When the temperature warms and the days lengthen, this has an impact on buyer and seller sentiment, which in turn influences property prices and the movement of the market.

If you are considering purchasing a property, whether this be a home or investment property, seasonality is often forgotten as an important aspect for consideration.

For home buyers, spring might bring more options to market so you might finally find that dream home you have been searching for, but beware.

Since the days on market are shorter you will have less time to procrastinate if the right property presents itself.
Understanding seasonal patterns will help property investors time their purchases and sales, capitalise on seasonal trends and maximise returns.

If you are selling your property, the heightened activity in Spring might bring more opportunities for property sales and even a change in sale strategy. This might mean an auction campaign is favoured over a sale by private treaty to get the best sales price.

How seasonality impacts property market dynamics

Spring is traditionally seen as a peak season for the property market.

With warmer weather and longer days, it is a time when both buyers and sellers are more active. In contrast, winter is generally slower, with colder temperatures and shorter daylight hours leading to reduced market activity.

These seasonal shifts significantly affect the days on market and auction clearance rates.

During spring and summer real estate markets tend to be more vibrant.

Warmer weather encourages more open house inspections, auctions, and overall property activities (like gardening and renovating). Properties tend to look better their best in spring.

The warmer weather and sunshine can induce more positivity and optimism. The longer daylight hours and favourable weather conditions mean there might be more stock available for sale on the market, more open homes, and more sales via auction campaigns.

Investors should take note of this, because when there is more activity and positive buyer sentiment, this is likely to increase real estate prices.

This is particularly true as it gets closer to Christmas and some buyers start to feel a little desperate to get into a home ‘before Christmas’ which might push up prices. Sellers will usually take advantage of this increased activity and market their properties more aggressively, hoping to attract higher bids across the spring and summer months.

There is also an economic factor to consider.

Spring often coincides with the end of the financial year, and many buyers will have received bonuses or financial incentives. Additionally, it is a time when financial institutions may offer new lending products or incentives, making it easier for buyers to secure mortgages, contributing to rising prices.

Days on market

While the overall effect of seasonality will vary by region, general trends and patterns can be observed when comparing the seasons.

Days on market (DOM) is a key indicator of how quickly properties are selling. A lower DOM typically suggests a hot market with high demand, while a higher DOM indicates a slower market. If we look at performance in 2023 across the states we can see the seasonality trend.

In New South Wales, the DOM in spring 2023 was approximately 33 days, compared to 37 days in winter. In Queensland the average DOM in spring 2023 was 28 days compared to 34 days in winter, and Victoria had a spring DOM of 37 days compared to 41 in winter.

In fact, across the whole country properties were selling much quicker in spring than winter despite there being more stock on the market.

Exceptions to the seasonal rule

There are always going to be exceptions to these rules.

Because of Queensland’s warmer weather, winter does not significantly deter market dynamics and many in the southern states might consider relocating to the state.

Property prices are not suppressed as much during the winter months in Queensland, as the weather remains conducive to outdoor inspections and tourism.

Ski resorts and winter booms

Interestingly, while winter typically slows down the real estate market in most regions, it can bring on a boom for areas famous for ski fields.

Regions like the Victorian Alps and New South Wales Snowy Mountains can see a surge in property interest during the winter months.

These areas attract tourists and seasonal residents looking to invest in vacation homes or rental properties to capitalise on the winter tourism boom.