You can save more than $20,000 when selling or buying a property in Sydney and Melbourne simply by choosing the right month, which new research shows is May or June for buyers and July for sellers.
These are the findings of a first-ever study by three of Australia’s leading universities – Monash, Griffith and Swinburne – which reveals the warmer months are no longer the domain of best property deals.
Analysing property sales information from CoreLogic RP data over the past 20 years, professors Abbas Valadkhani, Andrew Worthington and Russell Smyth have revealed the best time to buy or sell has is now in the middle of the year, and no longer summer, as was the case before the 2008 Global Financial Crisis.
The study, ‘Seasonality in Australian Capital City House and Unit Prices’, found there were five key measures that affected the data from 1995 to the present day; including start of the new school year, beginning of public service contracts, weather, tax time and holiday periods.
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Melbourne provides for best savings on a house purchase if you choose the right month to buy. Data taken from the past 20 years of property sales suggests home-buyers can save more than $20,000 on average if they make a purchase around May. This one at 513 Napier Street in Fitzroy North is listed at $1.4m
Sellers of this property in Melbourne’s Fitzroy North suburb have listed the two-level property for sale at $1.4m. The warmer months were once the most profitable for vendors but that has changed significantly since the 2008 Global Financial Crisis
For sale at a price tag of $2,350,000 is this three-bedroom property at Lower Avon Street in Glebe in Sydney’s inner west. Sydneysiders are best off selling in the month of July according to new research, which can add $23,000 to a sale price
This $2.35m Glebe home has a front terrace with views and two expansive bedrooms on the upper level, master with ensuite. The best month to buy houses in Sydney is now June (saving $12,276) while for apartments it is December (saving $6,871)
$1.7m plus is being quoted for this four-bedroom house in Western Australia at 130 Jersey Street, Jolimont. December is considered the best time for home-owners to sell up in Perth when the average gain is $12,462
Researcher Abbas Valadkhani said that while property sales data shows the most popular selling and buying months have shift in the major markets in the past seven years, ‘there is no guarantee they will not experience further change in the future’
Their algorithms may be complex but they found the gains (or savings) can top $20,000 simply by picking the right month.
For instance, the best time to buy a house in Sydney is now June and in Melbourne it’s May. Apartments are also best bought in May for Melbourne but it’s December for the harbour city.
That’s a significant shift from the pre-2008 period where it was December and November respectively and when selling and buying months ‘were much more stable’, according to the study’s authors.
If you are hoping to cash in on your bricks and mortar, the best value comes from selling a house in Sydney during July where it once was January (pre-2008) and a unit is now best sold in June not February as it was pre-2008.
Melbourne houses have always been most expensive in July.
Professor Abbas Valadkhani said ‘the detected seasonality effects are statistically significant’.
‘While it may be possible for buyers and sellers to make abnormal gains with knowledge of these seasonal effects, there is no guarantee that they will not experience further change in the future.’
Professors from three leading Australian universities used data from the past 20 years of property sales across Australian and complex algorithms (right) to come up with the best months to buy and sell houses and apartments
While Melbourne houses have always been most expensive in July, the opposite is true in Adelaide where they are at their cheapest at that time of year, giving buyers a saving of $7,019 on average. This three-bedder at 5 Frederick Street in Gilberton is listed at $775,000
$1.38m is the asking price for 91 Laurel Avenue, Chelmer in Queensland. Brisbane homes bring in best returns for vendors in January
Brisbane properties remain among the least price-volatile in the housing market, according to the researchers who used 20 years of sales data. They found that houses in the Queensland capital have always made the most for sellers in January
CAPITAL CITY MEDIAN PRICE BEST MONTH TO BUY SAVING BEST MONTH TO SELL GAIN
SYDNEY
$687,115 DECEMBER $6871 JUNE $20,682 MELBOURNE $517,066 MAY $19,080 JULY $14,426 BRISBANE $399,263 MAY $4,751 NOVEMBER $3,234 ADELAIDE $327,350 JUNE $5,630 SEPTEMBER $7,202 PERTH $485,577 FEBRUARY $4,225 MARCH $9,323 HOBART $301,054 OCTOBER $20,321 FEBRUARY $17,913
DARWIN $397,8634 SEPTEMBER $10,901 AUGUST $6,843 CANBERRA $407,421 NOVEMBER $2,200 FEBRUARY $4,604 *Figures from ‘Seasonality in Australian Capital City House and Unit Prices’ study by Monash, Griffith and Swinburne universities
The report also found ‘Australia is one of the most consistently expensive, unaffordable and strongest-growing housing markets in the world’.
‘We examine seasonality in house and unit (apartment) prices in the eight Australian state and territory capital cities,’ the researchers added.
‘Our main finding is that sizeable seasonal effects exist for both the very smallest (Darwin and Hobart) and very largest (Melbourne and Sydney) capital cities and that these seasonal effects are mostly predictable.
‘By utilising such seasonal variations, both buyers and sellers can make informed financial decisions.’
And the savings are large, in some cases.
On average, the saving on a house bought in Melbourne in May provides for an average saving of 2.52 per cent and based on 2015 median house prices for the Victorian capital, that’s a $20,670 saving for home-buyers.
The smaller markets like Hobart and Darwin are the most volatile for houses and units, Adelaide and Brisbane are the least price volatile house markets and Sydney and Melbourne are the least price-volatile unit markets.
‘The Australian market has experienced significant change in the 20-year sample period. In the two largest markets of Melbourne and Sydney, there is evidence that the investment boom has influenced the seasonal effect in the second sample period (2008-2015),’ Professor Valadkhani said.
‘Both house and unit prices were noticeably more volatile in the more recent period, compared to the period before the GFC where they were much more stable.
‘Therefore, while it may be possible for buyers and sellers to make abnormal gains with knowledge of these seasonal effects, there is no guarantee that they will not experience further change in the future.’
But for those hoping to break into the property market, the researchers added a sobering note.
‘According to the most recent Annual International Housing Affordability Survey, housing in the five major metropolitan areas (Sydney, Melbourne, Brisbane, Adelaide and Perth) is rated as “severely unaffordable”, with Sydney and Melbourne, Australia’s two largest cities, considered to be the third and sixth least affordable city in the world respectively.’
The three-bedroom, three bathroom at 6/4 Pope Court Bayview in the Northern Territory is listed for sale at $940,000. Darwin has been found to be among Australia’s ‘most volatile housing markets’
New research shows the most expensive months in which to buy a house across Australia are now March and July
102 Jansz Crescent, Griffith in the ACT has a sale price of $1.9m. Canberra’s property market was not unduly changed after the 2008 Global Financial Crisis. Houses are considered best value buys in October while they are most expensive in March