Looking to buy real estate in Australia but not sure which time of year is best for buying a house? Look no further! Let’s examine the best time of year for Australian home buyers and property sales.
How does the time of year affect the Australian property market?
Many factors impact the property market in Australia, with the time of year playing a major role. It is not just because the seasons change but because of other things that the different times of the year bring with them, making each particular season unique in its impact on the market.
Other factors impact market conditions (especially coming off of a global pandemic), like the state of interest rates and the number of properties in the market.
Using RP Data (rich property data) from Corelogic, we can see trends that have emerged in the housing market over the past 20 years. Here is a quick rundown of what you can expect if you are looking to sell or buy property at the major times of the year.
Spring property season
If you’ve been reading up on real estate trends, you might be wondering what makes the Spring property season stand out.
Spring is usually the busiest time of year for the Australian property market, with real estate agents taking advantage of the warmer weather to hold auctions and many homeowners looking to sell property. Spring helps to maximise a property’s curb appeal, with real estate looking its best in clear weather and with gardens in full bloom.
A greater number of properties on the market leads to more choices for buyers and less competition over the same real estate. An increase in listings usually outweighs the influx of new home buyers, making Spring generally thought to be a buyer's market.
This effect will be most pronounced in areas with bigger property pools, like capital cities of Sydney, Melbourne, Brisbane, Perth, Hobart, and Adelaide. While some other coastal areas of NSW and Queensland may also see this boom, rural areas will tend to experience a less concentrated effect.
Summer property season
When the weather heats up, we see a shift towards a sellers’ market. This means fewer properties for sale, which is less likely to drive up property prices. For those looking for a first home or to buy property on a strict budget, these market conditions could be ideal. Additionally, buyers should be aware of lenders mortgage insurance, which typically applies when a deposit is less than 20 percent, adding to the overall cost of purchasing a home.
If you are looking to sell property, this may mean you want to avoid the summer holidays to maximise your property value.
More people are on the hunt for a home at the beginning of the year, keen to move in before a new school year starts (avoiding mid-year school moves for kids) and the new year feeling of a fresh start. This could mean a quick sale, but does not always mean a huge number of properties on the market.
It is important to keep in mind the public holidays surrounding Christmas and the new year, which could lead to delays in processing your property sale or home loan application.
Autumn property season
Autumn is another desirable season when it comes to curb appeal boosting property prices, but your house may look better in the sunshine than the dreary Autumn rain.
Autumn can be considered a bit of a no-man’s land when it comes to buying and selling property, with fewer houses available for sale. This can mean there is less competition if you are looking to list your home for sale. It is not necessarily a recipe for a quick sale, and may mean that the new home of your dreams isn’t on the market.
Winter property season
While Autumn and Spring can both be good times to buy property, the winter months tend to be quieter.
This can lead to a decent sellers' market, with less competition and a smaller number of properties up for grabs. In comparison, your property could seem more desirable and fetch a higher price. It's important to make sure that your property is in top condition if you're selling in winter, since the cold weather can highlight flaws in a property to a potential buyer.
People also tend to spend a lot of time indoors in the winter months, which means they are less likely to buy property or go to auctions. Likewise, they are less likely to part with their property.
Economic and Financial Factors
The Australian property market is influenced by a variety of economic and financial factors that can significantly impact house prices and the overall market conditions. Understanding these key factors can help home buyers and sellers make more informed decisions.
One of the most critical factors is interest rates. When interest rates are low, borrowing costs decrease, making it more affordable to buy a house. This often leads to increased demand in the housing market, driving up property prices. Conversely, high interest rates can make mortgages more expensive, potentially cooling the market.
Inflation is another important consideration. High inflation can erode the purchasing power of buyers, leading to higher property prices as the cost of goods and services increases. On the other hand, low inflation tends to stabilise property prices, making it easier for buyers to plan their property purchase.
Employment rates also play a crucial role in the property market. High employment rates generally lead to increased demand for housing, as more people have the financial stability to buy property. This can drive up property prices, especially in areas with strong job markets. Conversely, high unemployment can reduce demand, leading to lower property prices.
The value of the Australian dollar can also impact the property market. A strong Australian dollar makes it more expensive for foreign buyers to purchase property in Australia, potentially reducing demand. Conversely, a weaker dollar can attract more foreign investment, increasing demand and driving up property prices.
By keeping an eye on these economic and financial factors, home buyers and sellers can better navigate the Australian property market and make more strategic decisions.
Does the property market always follow seasonal trends?
Though we can make some predictions about the best seasons to buy and sell property based on past RP data and historical market conditions, there are often other factors that contribute to property trends and make this less predictable.
This past year was an example of a break from the usual property seasons. Competition in the property market has remained high through the year despite high interest rates and unusual market conditions.
Part of this will have been the run-on impact of a global pandemic, as well as the current demand for rental property, lack of accessibility for first home buyers, and changing policy surrounding stamp duty and land tax.
Market Predictions and Forecasts
Predicting the property market can be a challenging task, but understanding market trends and forecasts can provide valuable insights for home buyers and sellers.
Many experts predict that the Australian property market will continue to grow, albeit at a slower rate than in previous years. This growth is expected to be driven by factors such as low interest rates, supportive government policies, and a robust economy. For those looking to buy property, this could mean a steady increase in property prices, making early spring or late autumn ideal times for a property purchase.
However, some experts also anticipate a market correction in certain areas, where property prices may fall. This is not expected to be a widespread phenomenon, but it highlights the importance of researching local market conditions. Understanding the specific factors driving demand and prices in your area can help you make more informed decisions.
The Reserve Bank of Australia’s (RBA) cash rate forecast is another crucial element to consider. The RBA has indicated that it expects to keep interest rates stable for the foreseeable future, which could continue to support the property market. Low interest rates can make borrowing more affordable, encouraging more people to buy a house and potentially driving up property prices.
Market trends and forecasts can vary significantly by region, so it’s essential to conduct thorough research on the local market. By staying informed about these predictions and understanding the key factors at play, home buyers and sellers can better navigate the Australian property market and make strategic decisions that align with their personal circumstances.
When is the best time of year to buy property?
In general, the best season (and the best time of year) to buy property in Australia is generally considered to be just before the winter months or just after — meaning late Autumn or early Spring could be your best bets.
