SEASONAL INVESTING - THE FACTS REVEALED

3rd July 2006

Spring is traditionally trumpeted as the perfect time to put your home up for sale, but Perth buyer's agent Liz Sterzel says research reveals the season is not the most important factor in buying or selling.

Ms Sterzel, from Property Wizards Buyer's Agency, says spring is hailed as the season that delivers sellers the best price based on suggestions that the warmer weather entices more buyers, and therefore competition, into the market and that greener, flowering gardens help properties look their best.

But she says a look at the statistics shows, in WA, autumn is the time when the most properties flood the market.

In the seven years from 1999 to 2005, the average number of house sales based on seasons were;

Autumn - 10,158
Winter - 9,250
Spring - 9,686
Summer - 9,371

"Spring sales are on average higher than winter, but the autumn sales are highest of all seasons," says Ms Sterzel.

"So it seems that while people may act on the belief that spring is a good time to sell, they take even more seriously the idea that winter is a bad time to sell, so they make sure they get in before winter and sell in autumn."

Ms Sterzel says it is difficult to measure whether sale prices are affected by the season, because property prices trend upwards, but a recent stratification study by the Reserve Bank of Australia* revealed some interesting seasonality results.

"It showed that seasonal highs were produced by shifts in sales volumes from lower priced suburbs to higher priced suburbs," says Ms Sterzel.

"For example, the December quarter median price is typically highest and in this quarter sales in higher priced suburbs are also high. An explanation could be that owners of higher priced homes in higher priced suburbs have more flexibility to time their sale to coincide with the warmer weather and spruce up their home for maximum sale price.

"A lower priced home owner may not have the financial choice to delay or time the sale.

"In addition, a bit of a spring clean, lick of paint and garden clean up could add a lot of value to a higher priced home, but perhaps is not as much of an incentive to do on a lower priced home."

Ms Sterzel says whatever the reason, it seems the higher sale price probably comes from making the house present better, and not from the season it's sold in.

"Based on this, our advice to sellers would be that what is more important than what season to sell in, is to ensure they spruce up their property so it presents beautifully," she says.

For buyers, she says the message is not to worry about which season to look for property in.

"Instead, buyers need to be clear about what they want and stay focused on that, without being overly influenced by the spruce-ups and spring cleans done on the properties they are viewing, as most would have been done purely to maximise presentation and push up the price," she warns.

"Because we buy properties every day, we see that, given two similar value offerings, it's presentation that wins the day and the higher price, whatever the season or the weather conditions."

*(ref: RBA Research Discussion Paper "Measuring Housing Price Growth - Using Stratification to Improve Median based Measures" by Prasad and Richards, April 2006, p8-10)

For more information, please contact
Mr Trevor Dunkley
Director
Property Wizards
trevor@propertywizards.com.au
Tel: (08) 9381 7450