Looking to sell or buy? Don't ignore winter
Traditionally, autumn and spring are the two most popular periods for selling residential properties. But seasonal factors have become a lot less important over the past few years. Australia’s population continues to increase sharply and Melburnians research real estate trends year-round to gain insights into the “pulse” of the market and the forces of supply and demand at work in specific suburbs.
Most sellers now realise they are better served by keeping track of the market dynamics of particular areas and then making an informed decision based on that information.
Carefully assessing the likely level of demand for your property makes selling in winter advantageous for many prospective vendors. This is especially so for those sellers who go to auction in July, in the lead-up to spring, when there are just as many buyers looking for a home but fewer properties available.
Winter is often overlooked as a good time to sell. However, it may be possible to achieve stand-out results in winter with fewer listings to compete against, which, in turn, almost always attracts a greater proportion of interest compared to other seasons.
An analysis of winter sales performance conducted by Property Analytics shows that in the three years to 2018, residential properties in Melbourne’s Inner North that went to auction achieved an average 71.5 per cent auction clearance rate. By contrast, the three-year auction clearance rate in spring was 68.7 per cent.
The data examined by Property Analytics included results reported by real estate agencies and through the Victorian Valuer General’s office. Melbourne’s Inner North includes suburbs surrounding Nelson Alexander’s office locations.
Nelson Alexander Partner, Nick Smith, explains the advantages of a winter campaign.
Anecdotal evidence from agents also suggests that vendors sell their homes faster in winter than in spring or autumn – results that are directly related to constant demand and diminished supply.
Many people believe the market is quieter during winter because it’s cold and wet. Just don’t ignore the fact that Australia’s capital cities – notably Sydney and Melbourne – are absorbing the bulk of the expansion in one of the world’s fastest growing populations.
The exceptional five-year run of house-price growth in Melbourne from 2012 saw many home owners become much better acquainted with the ins and outs of the residential market – and the opportunities for excellent capital growth.
It’s little wonder that Melburnians are now more sophisticated about the property market and are not so heavily influenced by blue skies and flower beds.
There is no evidence you will get more money for your property by waiting for warm weather. The reality is that as Melbourne’s temperature cools, the city’s auction supply contracts.
More residential properties go under the hammer in spring and summer, giving buyers plenty of choice. This puts sellers listing good-quality properties in winter at an advantage. At the same time, there are opportunities aplenty for well-researched buyers who can get the jump on other prospective buyers who may have only just started their search.
Australia’s steady population surge is one of the main factors reducing the seasonality in real estate transactions.
According to the Australian Bureau of Statistics, immigration has in recent years accounted for almost two-thirds of the growth, and three-quarters of the people have been settling in Melbourne and Sydney.
The nation’s two largest cities have been each adding more than 100,000 residents annually – equivalent to accommodating the population of Darwin each year. More than 270,000 migrants will arrive in Australia in 2019, up from 259,000 last year. The figure is 40,000 more than was forecast in last year’s Federal Budget.