Traditionally the media tells us that the spring season is the best time for the real estate market, there are more properties for sale if you’re a buyer and more buyers out there if you’re a seller.
Is this true?
PRDNationwide recently did some research to bust this myth, but before I explain the findings let me tell you my thoughts.
One of the things I constantly see as a property investment strategist is investors who have missed out on a great opportunity because they were so consumed with timing the markets, they forgot to actually take the plunge and buy something.
Generally, these investors become obsessed with the idea of buying right at the bottom of a property cycle so they can secure a “bargain”.
They wait and watch and when they start hearing talk in the media about a market slowdown or impending crash, they think, “Ah ha, now is the time to make my move! Or is it?”
You see, this type of investor becomes so determined to get the best possible deal that they are never quite sure if prices could go just that little bit lower; so they wait.
Of course by the time they realise they should make a move, the so called “bargains” have come and gone and the market is moving onward and upward again.
And as the property cycle starts over, so too does the waiting game played by these would-be investors.
While timing of the markets is important to some degree, it is definitely not the key to investment success.
There’s a saying in property circles that goes:
“WHEN WAS THE BEST TIME TO BUY PROPERTY? 20 YEARS AGO! WHEN IS THE SECOND BEST TIME – TODAY!”
In other words, you buy when you can afford to and when you are ready.
So while it may be interesting to know about the psychological trends of the property market related to the seasons, this should not determine your property investment decisions.
Having said that PRDNationwide concluded that there is a cyclical change in the number of properties for sale as well as selling prices a different times of the year, with in general a slight dip in prices during winter and summer.
On the other hand, there are usually more properties for sale in spring, although there is a higher level of competition there is also a higher level of buyers and the potential for the best price gains of the year.
Here’s what their research showed:
To bust the myth we’ve looked at the historic seasonal performance trends for houses across the Greater Sydney Region.
This includes the number of transactions over the past 5 years which demonstrates the level of supply and demand
Meanwhile the 5 year seasonal house price value gains will further indicate buyer demand and overall market strength.
Our research confirms the media buzz, with the spring season dominating the number of transactions at an average of 12,000 sales over 5 years.
Interestingly it is followed by a dip of 20.4 % in the summer months.
Meanwhile the autumn and winter markets show reasonable increases in the lead up to the “selling season” rising 13 % between summer and autumn and a further 4.1 % in winter.
The Greater Sydney Average 5 Year Seasonal Price Growth chart further indicates the strength of spring in the Sydney housing market, with median values growing an average of 6.3 % over the season.
Meanwhile prices dip in summer and winter which indicates a lower buyer sentiment over these seasons.
So it’s clear that the Sydney market blooms in spring but what does this mean for you?
From the data it’s clear that winter and summer offer the best conditions for buyers as prices are at their lowest however if they want more stock to choose from spring is the best time.
For sellers however spring is the best time to swing into action.
Although there is a higher level of competition there is also a higher level of buyers and the potential for the best price gains of the year.