The Different Seasons Of Property - When Is The Best Time To Buy/Sell?
Serious buyers don't generally take a 'holiday' from property inspections just because the season has changed. Andrew Stone explains why Winter is the best time to buy and sell.
In Melbourne, more properties are listed for sale in Spring than in Winter.
Regardless of the reasons, it’s a basic fact in the residential market – more vendors choose to list in the months leading into Christmas than in any other period.
But serious buyers don’t generally take a ‘holiday’ from property inspections just because the season has changed. Buying property is a time consuming and stressful process; from securing finance approval, choosing suitable suburbs, attending opens, researching sales, and sharing your contact details with agents, it requires commitment.
So, buyer demand is broadly the same in Winter as it is in Spring, but supply from vendors is dramatically less in Winter. The results should be intuitive, but unfortunately, they’re not widely known.
We’ve looked at auction activity across 200+ suburbs in Melbourne over the last 3 years.
The grey bars in the above graph show the number of auction campaigns conducted in Winter vs Spring, and the red bars show the % auction clearance rates. Far more properties are auctioned in Spring than in Winter – no surprise there. But, interestingly, a higher proportion of Auctions are successful in Winter than in Spring.
Why?? Lower supply of properties for sale translates into less choice for buyers and stronger competition at auction.
Simply put, when 10 buyers see only 2 properties for sale that suit their requirements, interest for each property (as indicated by auction bidding) will be strong. But, when 10 buyers see 5 properties for sale that suit their requirements, interest will be diluted, and bidding will be less competitive at some or all of the auctions.
As we move into Winter, buyers are getting frustrated by the lack of stock available to them. But it’s important not to make emotional purchasing decisions – in other words, don’t decide to bid higher just because of limited choice. Look rationally at the property, and know that it’s only a matter of time before other similar properties are listed for sale.
And if you’re a vendor thinking about waiting until Spring? Ask yourself why you wouldn’t want to list when there are fewer competing properties for sale on the market.
For what it’s worth, I always prefer to sell during Winter.
Winter is pretty much the only period where I strongly consider selling my development properties off-the-plan. And as a buyers advocate, Winter is the time that I work my network the hardest for off-market and newly listed opportunities.