Should you be keenly saving for a deposit or buying a home now? We explore the data and industry expertise to determine the best season to buy.
It’s the question homebuyers might ask themselves – when is the best time to buy? Should you keep saving for a deposit during the winter months and buy in summer? Or is it smarter to save in summer and buy in winter?
Views are mixed on when you’re likely to get the best deal, but the facts and stats suggest that seasonal factors do have an impact on the Australian property market.
The holiday factor
School holidays usually spell a lull in real estate listings, according to Real Estate Institute of Australia president Malcolm Gunning, because families postpone house hunting in favour of spending time with the kids.
“Family units are big spenders and they pack up and go away during the school holidays, which means as a seller you lose a large proportion of prospective buyers.”
While this means less competition for buyers – and possibly lower prices as a result – it also means there are fewer properties on the market to choose from as sellers tend to hold off and put their home on the market after the holidays.
The winter lull
“Activity in the real estate market reflects our normal lifestyle. The spring months tend to be the busiest times of year, while we generally hunker down in winter,” Gunning says. “Sellers don’t want people walking through their home at a time when they’re staying in more. The rhythm of life really does impact on real estate.”
July in particular is a quiet month, with school holidays interrupting the normal movement of the market and cold weather putting off a large number of buyers from house hunting, according to Gunning.
“July is an opportune time to buy because there is not a high amount of activity,” he adds.
Winter can be a good time to buy because you’ll be competing against fewer buyers, while sellers who list their property out of season may be more likely to negotiate for a quick sale. In this case, continuing to save for a deposit during summer and autumn may be a wise strategy.
The January sell-off
Many buyers rush to buy and settle before Christmas, before the market hits a slump in January as the whole country breaks off for the summer. “If you’re in the market for a new home, January is another good time to buy,” Gunning says, “as you may be able to pick up a bargain on a property that was passed in before Christmas.”
“November and December are the biggest auction months,” he adds. “From a buyer’s perspective, January is often an opportune time to buy as some of those properties passed in before Christmas come onto the market as a private treaty sale.”
What do the numbers say?
Figures from 2016 and 2017 by CoreLogic RP Data back up the seasonal nature of the property market. Across all eight capital cities, there were more listings and sales recorded in the spring months of September, October and November than the other three seasons, and in all cases except for Darwin and Adelaide, house prices were also more expensive in those months.
In Sydney, for example, there were 35,055 listings in spring 2016, with 14,925 sales and a median price of $990,000. In contrast, buyers were able to secure better deals in winter 2016 and summer 2017, when reduced activity adjusted the median price of sales to $890,000 and $906,000 respectively.
The cheapest time to buy in Melbourne was also in winter 2016, when the median price was $620,080 versus $670,000 in spring.
Tim Lawless, CoreLogic’s research director, said: “While we occasionally see variations, Australia’s housing market tends to fit into a seasonal pattern. Traditionally, spring generally attracts more listings and therefore more buyers and higher prices. It’s important to remember, however, that a number of factors influence property prices, including population growth, dwelling construction, access to finance and government regulation among others.”
Making your move
Deciding when to buy comes down to your personal circumstances, but it helps to understand the dynamics of the market in the area you’re looking to buy. While getting a good deal on your home is important, so is saving a decent-sized deposit to get you off to a good start. It’s also worth seeking advice on home loan options before you buy.