I recently interviewed Dr. Andrew Wilson, senior economist with the Domain Group on my weekly Real Estate Talk show. Interestingly he felt this is the best winter real estate market he’s seen in a long time.
Here is the transcript of that interview:
Kevin Turner: You’ve seen a few markets, too, Andrew. I don’t want to take a stab at your age here but you have a fair bit of experience. Do you think this is a good market, and why?
Andrew Wilson: Thankfully we won’t go into how many markets I’ve seen, Kevin. It could get a little bit …
Kevin Turner: Scary.
Andrew Wilson: … uncomfortable, but nonetheless we really are set up for one of the best winter markets, particularly on the Eastern Seaboard, that we’ve seen in a long time. Typically of course, we see buyer activity waning over Easter.
Buyers tend to focus, and sellers tend to focus, on that autumn and spring market because the decision making is made either at the beginning of the year or at the end of the year. Winter tends to be that in between period.
Of course there is issues to do with colder weather and distractions from sporting events and a lot of people with higher priced properties actually take lengthy holidays in the middle of the year.
It has been a quiet period typically but we are starting to see the cyclical factors overriding those seasonal factors this year.
We are seeing in Sydney and Melbourne record numbers of options for autumn for the first five months of the year, and record markets for May.
The trend continues to rise.
My forward indicators are that we will continue to see very high numbers of property put under the hammer over June. Clearance rates are still very strong in Sydney so buyers are still active and they’re still quite solid in Melbourne as well.[sam id=37 codes=’true’]
The other thing that is active in the market that shows us that perhaps we’re going to have a very strong winter is that the prestige market, particularly that Sydney prestige market, is on the rise.
Also, the Brisbane prestige market is up and running too now. I think that sellers will be trying to take advantage of the buyers that are around at the moment, those trade up buyers.
That’s why I think we’ll see particularly Eastern Seaboard markets very strong this winter. I guess we’ll overshoot those typically subduing winter factors that keep the market quiet over those June, July, August months.
Kevin Turner: What would your advice be to anyone who’s got their property and their thinking about marketing it? Is there a good or a bad time to be doing that?
Andrew Wilson: Typically the market slows down over June.
July is a quiet month and then it starts to ramp up over August, but I think we have a very atypical environment at the moment. Markets are still strengthening. Buyers are still active, sellers are still active.
Maybe it’s a factor that we’re starting to miss this year, at least those seasonal aspects. Everyone can take advantage of the low interest rates. Prices are rising, and consistently, so people want to take advantage of getting into the property market before prices rise any further.
There’s a lot of factors there, Kevin, I believe that will keep this winter market kicking over and at levels probably we’ve never seen before.
Kevin Turner: Here we are in June and as you rightly said that we don’t get a lot more listings coming on the market until, say, around September. It’s always occurred to me that if I wanted to sell my house I’d like to put it on when I’m under, say, less competition, which is right now.
Andrew Wilson: That’s right. The notion of seasonality is a little bit vague when we’re talking about houses because each house is different in time and space and in its nature. Every buyer and seller has a different agenda and a different motivation.
It’s not as though we’re talking about oranges or apples, which are basically the same, and they have seasonal aspects to changes in prices.
But it is that we get less stock over winter typically, and less high price stock, so we tend to look like house prices are falling or not growing as fast over that period, but it is more about compositional issues that keep that price growth looking like it’s lower.
In fact there are still buyers and sellers around, and this year we’ll see more buyers and more sellers than I think we will ever have seen before in a winter market, particularly on the Eastern Seaboard.
It’s just this convergence of factors that are really pushing that winter market along above its normal levels.
Kevin Turner: Senior economist with the Domain Group, Dr. Andrew Wilson. Great talking to you as always. Thanks for your time, Andrew.
Andrew Wilson: Thank you so much, Kevin.
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