Investors’ guide: How to purchase property in a buyer’s market
How do you buy a property in a buyer’s market? We give you tips on how to make it work in your favour. ...
Is winter a good time to buy a property? We give you reasons why the chilly season can be a great time for property purchases.
Traditional home-buying wisdom holds that spring is the best time of the year to buy a home or investment property in Australia. And if we’re to review the numbers, this belief holds water. Data from CoreLogic showed that each spring over the last few years had seen at least one month where over 3,500 auctions occur – that’s more than 115 properties going under the hammer every day during the season.
Data also showed that in recent years, the number of the available properties on the market also significantly rises above the year-round average in the lead-up to (and even during) spring, as more property owners look to take advantage of the prime weather conditions to sell their properties.
At the same time, the high number of properties on the market during spring is equally matched by the strong demand of home buyers. That’s why this period is also known as the spring blitz, as properties seemingly sell themselves – resulting in fast-selling times and a high volume of property sales during the spring months of September and November.
But how about winter? Can it be a good season to buy real estate?
Winter can also be a great time to buy a house or investment property. Despite the chilly season’s reputation for being the property market’s hibernation period, buying in the winter can be ideal for some home buyers. According to a study by Peter Rossini, a property expert from the University of South Australia, properties sell for approximately 1 per cent less in winter than in the other seasons – making it an excellent period for bargain-hunters to buy property.
Aside from this pocket-friendly advantage that winter brings, here are other reasons why the underrated season can be a good time to buy property.
Reasons why winter is a good time to buy property
In the winter, there’s a low number of property owners selling a house or unit. This market trend coincides with a low number of people looking to buy property. After all, not everyone’s willing to look at homes in single-digit temperatures.
For sellers, this sounds like bad news. But for buyers, this is the perfect opportunity to go property hunting as it means you will face lower competition, and there’s a low chance you will be outbid.
With a large chunk of the buyer competition out of the running (or never in the race in the first place) for a property, buyers can also be a bit more selective with their purchases.
Of course, the more popular selling seasons (spring and summer) offer a higher number of choices compared to winter. However, the chances of successfully buying any home are higher when it’s colder. Fewer buyers mean fewer all-cash, over-asking offers — making your traditionally financed offer more appealing to sellers.
When you buy in the summer or spring, you’re seeing properties at their best, in ideal weather conditions.
But one big drawback of buying a home in the summer is that you don’t really get a chance to see how the property fares under snow, ice, and low temperatures.
By viewing homes in the winter, you have the perfect opportunity to evaluate the property under one of the worst weather conditions possible.
Plus, you will get a good idea of what you or your potential tenants are in when the weather gets tough. Are the windows drafty? How strong is its insulation? How does the property look with barren trees and shrubs?
Just as you’d be judgemental of a first date who shows up wearing a tracksuit or sweatpants, this is your chance to be extra critical of a property you’re thinking of committing to.
Because the real estate market activity hits a new level of frenzy in the spring and summer, mortgage brokers tend to be backed up on their work, which means you’ll wait longer to close if you buy in the warmer months.
And if you’re working on a tight timeline, it could be frustrating to have to wait for closing just because your mortgage broker can’t focus on your transaction.
But during the quieter winter months, transaction volumes significantly slow down, giving mortgage brokers enough breathing room to process your loan. This means buyers can close out their loans much faster due to the shorter waiting times.
Typically, sellers putting their property on the market in the depths of winter seriously want to seal the deal fast. This gives buyers the upper hand when negotiating, as this means vendors will be more willing to work with you.
Buyers are also advised to track the cumulative days on the market for each home they view. If the property has been on the market for a generally long period of time, this gives you more leverage to secure a good property for a fraction of the higher prices you may have to pay when spring or summer comes.
But a word of advice: just because a seller is eager to sell fast, doesn’t mean you should lowball them or make unreasonable demands. Doing so can sabotage your own chances of securing the property. Instead, work with your real estate agent to determine an appropriate negotiation strategy.
Buying a property during winter might seem like a fool’s errand, as everyone infamously knows spring and summer are the home-buying seasons and winter is the time when buyers and sellers cool it for a bit and take a break.
But the reasons we have outlined can give the argument that winter can be good – even the best time – to buy property a leg to stand on, especially if you go strategically about it.
Disclaimer: This is a general guide only and is not intended as a substitute for financial or investing advice.
If you want to learn more about the latest industry expert insights on the property market and other general information that will help you along your investment property journey, check out our amazing podcasts. Also, make sure to check our News section for the latest property market reports, insights, news and useful tips and strategies for investors.
A real estate agent is a licensed professional authorised to act as a representative for buyers or sellers in a property transaction.