Category: Insights

As the inflation beast is gradually brought to heel, borrowers are becoming increasingly confident that interest rates have reached their zenith and are again borrowing with relative gusto.

It’s first home buyers who are leading the charge, with investors not too far behind.

The latest Australian Bureau of Statistics (ABS) data shows that in November new home and investment property loans were up 13.1 per cent over the year.

The value of new loan commitments for investors was rising higher than owner-occupier borrowers. Investment lending increased by 18 per cent to reach $9.72 billion while owner-occupier new loan commitments were up only 10.6 per cent over the year to reach $17.86 billion in loans.

But it was first home buyer activity that stood out, with a 25.8 per cent increase in the value of new loan commitments for first-time buyers that saw the value of new loans reach $5.25 billion.

Canstar’s lending expert, Steve Mickenbecker, said the figures suggested Australian had confidence in the property market excelling in 2024.

“You could say investors are back, with new lending up by 18 percent year-on-year, suggesting they hold a healthy expectation for property prices over the coming few years.

“Looking at the number of buyers, first home buyers’ participation represents 37 percent of all new loans.

“First home buyers have in recent years had to weather the impact of rate rises on borrowing power.

“Canstar’s analysis shows for the average income, a solo borrower has seen their borrowing capacity fall since April 2022 by $137,000 and likewise, a double-income couple’s budget has been depleted by $331,000.”

Real Estate Institute of Australia (REIA) President, Leanne Pilkington, expressed relief that there was a return of investors.

“The results follow the latest ABS data showing the consumer price index rose 4.3 per cent in the 12 months to November 2023, down from 4.9 per cent per cent in October.

“The 13 interest rate rises have finally curtailed inflation, with all signs showing the economy is now heading in the right direction.”

Ms Pilkington said owner-occupier loans recorded moderate growth in November with some states such as Tasmania and NSW showing signs of stabilising.

ABS data shows new loan commitments in Queensland rose 3.3 per cent, Victoria rose 2.0 per cent, South Australia rose 6.9 per cent, in the Australian Capital Territory rose 9.4 per cent and in the Northern Territory rose 6.0 per cent while New South Wales fell 1.1 per cent, in Western Australia fell 2.9 per cent and Tasmania fell 15.2 per cent.

While new loans may have slipped in Western Australia, the value of the average loan size reached record levels there, as well as in Queensland and South Australia, reflecting the strong capital growth in those property markets over the past year.

Queensland reached $557,510, South Australia $510,057 and Western Australia $497,275 in average loan size.

Helen Avis, Director of Finance, Specialist Mortgage, said Perth was seeing a lot of interest from eastern states buyers.

“With stock levels so low – there are now just over 3,000 properties for sale in Perth and many are being sold as soon as they are listed – it’s little surprise that borrowers are taking bigger loans to achieve their property goals.”

“While not quite on the same scale, a similar picture was playing out in Adelaide and Brisbane and south-east Queensland.”

Maree Kilroy, Senior Economist for Oxford Economics Australia, agreed that Perth could expect further strong growth in 2024.

Following the rebound over 2023, we expect 2024 will be a softer year with home prices increasing a more muted 2.7 per cent nationally.

“Units are expected to outpace houses as affordability pressures, migration patterns, and weak apartment completion volumes intensify competition in the city apartment markets.

“While Sydney and Melbourne are expected to record relatively softer growth, Perth is well-equipped to lead the pack as the city develops a more sizeable dwelling stock deficiency.”

Rate cuts could mean game on for refinancing 

Refinancing largely stabilised in November after three months of steep declines.

The value of refinanced mortgages rose slightly in the month of November, lifting by a modest $121 million – the first increase in four months.

RateCity.com.au research director, Sally Tindall, said that while we’re now well past the peak in refinancing, the value of mortgages switching each month is still at elevated levels.

“Rock bottom rates in 2021 might have shone a spotlight on refinancing, but the rising cash rate has been the blowtorch that’s spurred many borrowers into action.

“The latest ABS data shows over 700,000 mortgages have refinanced since the start of the rate hikes, switching more than $360 billion worth of loans.

“Refinancing could well drop further in the first half of 2024, however, if we do see cash rate cuts later in the year it could be game on for some borrowers ready for their next move.

“It’s fantastic to see first home buyer numbers rising again in the month of November, despite rising rates and property prices.

“These numbers are likely to lift further in 2024, particularly when the government’s much touted Help to Buy scheme finally gets up and running.

“While this scheme will help lower-income first home buyers on to the property ladder without having to shackle themselves to super-sized debts, the places in this scheme are set to be capped at just 10,000 per year, which is unlikely to be enough to cater for the potential demand,” she said.

In the pursuit of happiness, there’s a special kind that comes from owning your own Aussie home.

Recent research from Great Southern Bank has revealed that homeowners are happier than renters. There’s a unique sense of fulfilment that accompanies having a place to call your own, and it extends beyond mere bricks and mortar.

The Aussie dream: more than a roof over your head

According to the No Place Like Home report, 70 per cent per cent of respondents agreed that owning a home is an important factor in their happiness.

Despite interest rates increasing and global issues of concern, the report’s research still shows optimism among Australians wanting to purchase a home.

Half plan to buy a home to live in within the next three years. Half of renters are also hopeful of buying a home to live in within the next three years too.

What the research shows is there is still growing aspiration to own a home, with it not just being homebuyers that are looking. Forty-two per cent of existing homeowners are thinking of buying their next home – either upsizing, downsizing or making a lifestyle change.

Embarking on the journey to home ownership is more than a transaction – it’s a voyage toward a happier, more fulfilling life – and the research proves it.

Owning a home is not just about having a roof over your head. It’s about embracing a lifestyle that reflects the warmth of the Australian spirit. Here’s what makes homeownership Down Under a key to happiness:

Stability and Security
A home is a sanctuary, a place where you feel secure, and your roots are firmly planted. It’s a stable haven in a world that’s constantly changing.

Community Connection
Aussie neighbourhoods foster a strong sense of community. From barbecues in the backyard to conversations over the fence, owning a home brings you closer to a network of friends and neighbours.

Investment in the Future
Beyond immediate joy, homeownership is an investment in your future. It’s a cornerstone for building wealth, providing a sense of financial security for years to come.

Personalisation and Pride
Your home is a canvas for self-expression. The ability to personalise and transform your space brings a deep sense of pride and accomplishment.

Freedom to Flourish
With a home of your own, you have the freedom to create the life you desire. Whether it’s raising a family, starting a new chapter, or enjoying your golden years, home ownership paves the way for your unique journey.

More than just bricks and mortar

The report found most people (81 per cent) consider their home their ‘happy place’, and almost three quarters (72 per cent) believe home is wherever their family or loved ones are.

Just over half say having a home is about having a place to celebrate their culture and traditions.

Home ownership is a journey that can be difficult.

Australian Bureau of Statistics data released Wednesday (6 December), showed the household saving to income ratio declined from 2.8 to 1.1, the lowest level since December 2007.

Household saving declined due to a strong rise in income payable (+6.3 per cent), which experienced its highest growth through the year (+27.9 per cent) since September quarter 1977. Income taxes drove the rise, in the absence of the Low and Middle Income Tax Offset, which ceased over 2022-23.

Inflationary pressure led to increased nominal household consumption (+1.4%), as consumers faced higher prices for goods and services, further contributing to the decline in household saving.

“Gen Z and millennials tell us that saving a deposit is the key barrier to taking that first step towards buying a home,” Megan Keleher, Chief Customer Officer, Great Southern Bank, said.

“It’s clear, however, that Australian home owners do become happier over time, as they build the equity in their home.”

Happiness is at its highest for mortgage-free home owners and Baby Boomers, with 57 per cent in each group saying they are happy with their current housing situation, compared to just 29 per cent of long-term renters.

The report found that 51 per cent of renters are feeling heavily burdened by their financial commitments – significantly higher than 36 per cent of home owners.

Many are being forced into share house situations they’d prefer to avoid.

Long-term renters are also more concerned about the cost of living (84 per cent) and housing affordability (80 per cent) compared to those who have purchased their own home (73 per cent and 62 per cent).

“Every individual’s home ownership journey and personal experience is different, but the report highlights that owning your own home does bring increased happiness for the vast majority of Australians,” Ms Keleher said.

Getting those keys  

Navigating the path to home ownership may seem daunting, but with the right guide, it becomes a joyous adventure.

Award-winning mortgage broker Helen Avis, Director of Finance, Specialist Mortgage, said finding a team that can help with the pathway to home ownership was a fundamental part of the process.

Tailored financial solutions – Every home owner’s journey is unique. We work closely with you to understand your goals and customise financial solutions that align with your aspirations.

Exploring the mortgage terrain – The world of mortgages can be complex. We simplify the process, providing clarity on terms, interest rates, and the various options available to you.

Maximising your buying power – We leverage the team’s expertise to ensure you get the most out of your investment. From finding the right loan to securing favourable terms, we are committed to maximising your buying power.

Ongoing support – Whether you’re a first-time buyer or looking to expand your property portfolio, we provide ongoing support to ensure your financial goals are met.

But the reality is that many Australians are feeling the mental, physical and financial strain of a dozen rate hikes since May last year and are struggling to cope with the markedly higher mortgage repayments.

Research conducted by finance platform MNY found that three quarters of Australian mortgage holders have been adversely impacted in terms of their personal lives or wellbeing.

That same 75 per cent said they would not trust any Reserve Bank of Australia (RBA) interest rates forecasts again.

With mortgage interest now averaging around 6.5 per cent, the reign of interest rate hikes means households with a $500,000 mortgage on a variable rate have seen their repayments increase by $1,500 per month in the midst of a cost-of-living crisis as their incomes are eaten away by high inflation.

Source: MNY.

Compounding the situation for those struggling is the argument that interest rates will likely rise, at least once more, before the tide turns and they begin to retreat.

Inflation is on a downward trajectory, which should bring rates down with it, but there some leading indicators that the battle against inflation may not be over.

Dr Shane Oliver, Head of Investment Strategy and Economics and Chief Economist, AMP Investments, said the risk in the short term is still on the upside for rates.

“In the short term, the risks are still skewed to a further increase in interest rates and or a delay in the start of rate cuts as: inflation is still too high; the labour market remains tight with upwards risks to wages flowing from higher minimum and award wage rises; productivity growth is very weak; and the rebound in home prices is partly offsetting the tightening impact of higher interest rates.

“Consistent with this, the RBA retained its guidance that some further rate hikes may be required.

“Key to watch will be the global economy, household spending, inflation and the labour market.”

Mortgage stress rampant

While the RBA has consistently stressed that Australians are well placed to manage higher interest rates after accumulating savings during Covid and paying down debt ahead of time.

But researchers are also revealing that mortgage stress is rampant.

Almost half (46 per cent) of mortgage holders are now under serious financial stress, according to Mozo, as home loan variable rates starting with 5, 6 and 7 become the norm.

The average variable rate of an owner occupier home loan is now 6.60 per cent across all lenders, and 7.21 per cent across the Big Four banks.

Based on the average variable rate of 6.6 per cent, since May 2022 monthly repayments on a $500,000 home loan have increased by $1,031.

In a market where one in three borrowers think refinancing is too much of a hassle, Helen Avis, Director of Finance at Specialist Mortgage, said it was imperative those with stretched finances sought financial advice and better deals.

“The refinancing process may seem time-consuming but the savings on offer make it worthwhile and the application process these days is not as onerous as people may actually think.”

The incentive to refinance is also backed up by research from RateCity.com.au that reveals more than a quarter of Australians (27 per cent) are living payday to payday.

It found one third (33 per cent) of respondents were feeling stressed or uneasy about their budget, while 32 per cent couldn’t survive off their savings for more than a month if they were to lose their job.

Financial strain doesn’t just hit the hip pocket. The survey also found of those in a relationship, over a third (39 per cent) said cost of living concerns have caused increased friction with their partner about money.

First home buyers facing major hurdles

First home buyers are being kept out the property market, often as a result of policies that had been intended to help them.

University researchers enlisted by the Australian Housing and Urban Research Institute (AHURI) found that the path to buying a first home is increasingly reliant on parental resources.

Professor Stephen Whelan, University of Sydney, said the issues confronting first home buyers were more complex than just higher property prices.

“While high and rising house prices are often cited as the biggest challenge faced by first homebuyers, our inquiry highlights that the problem is significantly more complex,” Professor Whelan said.

“Critically, we found existing policy settings are likely to have exacerbated rather than alleviated the challenge faced by first homebuyers to finance home ownership.

“Politically seductive measures such as first homeowner grants and tax concessions have failed to arrest declining rates of home ownership over time.”

A rapid expansion of owner-occupation in the early postwar period peaked at over 70 per cent in the late 1960s but was followed by a gradually declining home-ownership rate since 2000—especially among younger adults, where the rate for the 25–34 age cohort fell from 51 per cent in 2001 to 44 per cent in 2021.

There is evidence that housing affordability has decreased over time.

AHURI’s research showed that since 2001, the national ratio of median house price to median income has almost doubled to 8.5, and the time required for the accumulation of a deposit for a typical property has increased from six years median earnings in 1994 to 14 years today.

The decline in home ownership among younger adult cohorts has occurred despite expenditures in excess of $37 billion over five decades designed to enable first home ownership.

AHURI’s findings stated that policies designed to assist first home buyers must recognise and address structural issues associated with the treatment of housing in the tax and transfer system.

“Policy settings need to encompass intermediate tenures, such as shared equity as legitimate housing outcomes that may enable households to attain homeownership,” the report said.

A Google analysis in 2022, conducted by a Queensland bank, found that the number of people searching the term ‘refinancing’ had increased by a staggering 5,000 percent.

Lending indicator data released Friday (13 January) from the Australian Bureau of Statistics (ABS) shows a whopping $19.5 billion worth of mortgages were refinanced in November – the highest monthly amount in Australian history.

This figure smashed the previous record set in September 2022 by almost $1 billion.

“Recent ABS data has revealed that enormous numbers of borrowers are refinancing their home loans, indeed, the past six months have been the six biggest months in refinancing history,” Helen Avis, SMATS Group’s Director of Finance, said.

“Part of the reason so many borrowers are refinancing right now is because many lenders charge lower interest rates to new borrowers than loyal customers, as shown by Reserve Bank data.

“In October, owner-occupiers who took out new variable loans were charged, on average, 0.51 percentage points less than owner-occupiers with existing loans.

“Refinancing to a comparable lower-rate loan could potentially save tens of thousands of dollars over the life of your loan.”

The source of the Google analysis, the Great Southern Bank’s Chief Customer Officer, Megan Keleher, said rising interest rates and the increased cost of living have affected household budgets and driven more customers to seek options to save on their home loans.

“They’re using the internet to find out how much they can borrow, how to refinance, and what support may be available for first home buyers.

“Using tools like a refinance calculator can really help; we’ve seen a 16 per cent increase in people using our refinance calculator over the last three months,” Ms Keleher said.

Negotiating a lower rate with their lender or switching in pursuit of a better deal is one of the best ways for mortgagees to prepare for even higher interest rates, Canstar’s Financial Services Group Executive and chief spokesperson, Stephen Mickenbecker told API Magazine.

“The Canstar Consumer Pulse Report released recently, found just a small proportion of mortgage holders (15 per cent) have switched lenders in the past year and secured a better deal, while only 8 per cent tried and failed. This means 77 per cent of borrowers could potentially be paying a lot more for their loan than what is on offer in the market today,” he said.

Released in mid-December 2022, the Canstar report surprisingly revealed that when it came to mortgage holders coping with higher interest rates, almost one in two – 48 percent – of homeowners with a mortgage and 37 percent of investors with a loan – are unsure how much their mortgage interest rate has risen since the Reserve Bank started aggressively lifted interest rates in 2022.

“When asked how prepared they are for even higher interest rates, close to two-fifths (39 per cent) of homeowners and more than one-quarter (27 per cent) of investors are not prepared. The majority of these indicated they would need to cut their living costs further to make ends meet,” Mr Mickenbecker said.

“It’s disappointing that borrowers are not more engaged with getting a better deal, either from their own bank or by switching banks.

“Most borrowers are paying interest rates well above the relatively low rates being offered to new customers, and the monthly savings are too big to ignore.

“Borrowers can’t wait until they are unable to pay the bills to refinance into a lower rate loan as by then their desperation will be matched by lender aversion and they may find themselves out of luck with new lenders,” he said.

Fixed rates about to fall off cliff

As the countdown to the fixed-term cliff approaches for many property owners, few new borrowers are fixing their home loans.

The housing market, as well as borrowers, will be faced with $478 billion in fixed rates loans transferring to variable rates.

This is the so-called mortgage cliff that arises from the rollover of fixed rate mortgages taken out mid-2020 to early 2022 at interest rates around 2.5 per cent, and transitioning within the next 18 months into loans priced at 5.5 to 6 per cent. There is a large proportion of these loans falling due before the end of 2023.

“Unlike a year earlier when about half of borrowers were doing so, only 4 per cent of borrowers fixed their loans – both new loans and refinance – in October (the most recent data available).

“By contrast, 44 per cent of borrowers fixed in October 2021 and 46 per cent in August 2021, when fixing peaked,” Ms Avis said.

“While the Reserve Bank only started increasing the cash rate in May 2022, lenders knew it was coming, so they’d already started raising interest rates on their fixed- rate loans.

“In response, borrowers had begun shifting towards lower-rate variable loans.”

This is confirmed by Reserve Bank data on new owner-occupied loans.

In October 2021, the average interest rate on a new fixed loan (with a fixed period of three years or less) was 0.63 percentage points lower than a new variable loan. By February 2022, new fixed loans had become 0.09 percentage points dearer; by May they’d become 0.70 percentage points dearer.

That has since declined – by October, they were only 0.30 percentage points dearer.

Mr Mickenbecker said 39 percent of homeowners and 27 percent of borrowers polled in Canstar’s Consumer Pulse Survey in 2022 were unprepared for further rate rises.

“According to the survey, a small group of property owners (5 per cent) say they are considering selling in the next two years because they can’t afford higher loan repayments.

“While this is a small minority, the group is likely to be concentrated among more recent borrowers, with their larger loans and repayments, who have no time to have put together a buffer and have low equity.

“The impact of interest rate rises and falling property prices spreads unevenly, and recent first home buyers who overreached to get into the market will carry more than their share of the pain,” Mr Mickenbecker said.

Mortgage stress mounting

That pain will translate into falling house values and mortgage stress.

When surveyed for the Pulse Report, close to two fifths (39 per cent) of homeowners and more than a quarter (27 per cent) of investors were not prepared for higher interest rates.

The majority of these indicated they would need to to cut their living costs to make ends meet.

“If the price declines deepen to the point where many new loans in particular start falling into negative equity, the concern will heighten.

“At that stage, individuals will be feeling extreme pain and the system will be at risk,” Mr Mickenbecker said.

“With the full force of interest rate increases yet to take its toll, borrowers in particular look to be on a knife-edge, and have a limited buffer.

“A worthwhile New Year’s resolution for Australians might be to sit down and do a refresh of their household budget to work out a way to restore their financial resilience.”

Can there be high demand for housing with high interest rates?

Economist and real estate markets expert, UNSW Business School of Banking and Finance associate professor Dr Kristle Romero Cortés, told API Magazine she believes housing demand can withstand these financial pressures.

“Intrinsically, mortgage rates and house prices are related via supply and demand channels. If we see that the trend is that home purchases become unaffordable due to repayments, you may see a decrease in home purchases.

“However, high-income earners need more incentive to accept lower prices when selling their homes if they can afford their repayments.

“The repayment rates would need to reach a level that selling the house now to purchase one in the future eventually becomes an attractive option.

“There has already been a move to short-term fixed loans to stabilise payment expectations. This will remain the case for borrowers; it will be interesting to see how the long-run rates on fixed loans react (3 to 5 years) because, currently, those are priced high,” Ms Cortes said.

This article, first published 11 January, was updated on 13 January with the latest ABS refinancing data.

Undeterred by property prices in Melbourne and Sydney coming off the boil or the threat of higher interest rates, expatriate Australians are continuing to snap up properties priced considerably higher than median city values.

Helen Avis, the SMATS Group Director of Finance, said the expatriates that had recently returned to Australia were moving from rentals into their own properties and could afford prestige real estate in highly sought-after areas.

“The $2 million to $4 million bracket has been very active as expats plan their eventual return and want to buy the future home, or move from their temporary rentals having recently returned,” Ms Avis said.

The recently-name finalist in the national Better Business Awards, in Best Residential Broker category, said she had also seen a lot of buyers targeting regional areas, holiday locations and the holiday home market.

“There’s very little investor or expatriate interest in CBD city apartments – that market has dried up – but there is still a lot of demand for luxury apartments as well as houses in the higher-priced suburbs.”

The first quarter of the year has seen Australian dwelling values rise by 2.4 per cent, less than half the pace of the same period last year.

But expatriates seeking a home rather than an investment can afford to pay the premiums that two years of rapid price growth has delivered and are not phased at the prospect of higher interest rates.

Interesting times

The big four bank economists are forecasting official cash rate hikes could begin between June and September.

Not waiting for the Reserve Bank of Australia, Australia’s third and fourth largest banks, NAB and ANZ, on Friday (1 April) hiked fixed rates by up to 0.40 percentage points.

“We have seen all banks raise fixed rates so many times in the last six months and I expect the RBA will raise rates from June,” Ms Avis said.

“I don’t think they want to raise them and then continue to raise them regularly, so it should be a slow progression, but the market is expecting interest rates to rise.

“All borrowers are assessed at 3 per cent over the benchmark rate, so it shouldn’t put stress on people’s ability to maintain their loans.

“With the borders just opening back up, we should have a two-year backlog of intended migrants, expats and international students start to push up the rental market as well as CBD sales.

“The intended migrants will likely rent to start off with, but most will likely want to buy, so demand will again be strengthened.”

Ms Avis said SMATS Group’s aussieproperty.com had clients looking at all states’ markets but Queensland was generating the most interest.

Sydney, Melbourne, Perth and the West Australian southwest were also on the radar of returning expatriates, she said.

The Better Business Awards seek to champion the leading players of the broking industry in each state and territory of Australia.

Reaching the finalists stage is regarded as an incredible achievement across the Australian broking industry, showcasing the depth of dedication and commitment each individual and team brings to advancing the industry.

Ms Avis said she was humbled to be recognised and proud to be named as a finalist. Winners are announced at a ceremony on 19 May.

When considering purchasing an investment property, seasonality is often forgotten as one of the important aspects to consider.

Seasonal changes will have an impact on buyer and seller sentiment, which in turn influences property prices and the movement of the market.

Understanding the seasonal patterns will help property investors to time their purchases and sales, capitalise on seasonal trends, and maximise their returns.

How does seasonality impact property markets?

Spring/summer

While the overall effect of seasonality will vary by region and state, general trends and patterns can be observed when comparing the cooler months to the warmer months.

During the spring and summer months, the Australian real estate markets tend to be more vibrant.

Warmer weather encourages more open house inspections, auctions, and overall property activities (like gardening and renovating).

The warmer weather and sunshine often influences buyers to be more positive and optimistic and generally willing to get out and explore open homes in a positive light, which can influence the overall sales price for the seller.

The longer daylight hours and favourable weather conditions means there might be more stock available for sale on the market, more open homes, and more sales via auction campaigns.

Investors should take note of this, because when there is more activity and positive buyer sentiment, this is likely to increase real estate prices, particularly as it gets closer to Christmas and some buyers start to feel a little desperate to get into a home before Christmas, which might push up prices.

Sellers will usually take advantage of this increased activity and market their properties more aggressively, hoping to attract higher bids across the spring and summer months.

Characteristics of spring/summer markets:

• increased buyer activity and competition
• sellers are more willing to list properties
• more open house inspections and auctions.

Autumn/winter

Conversely, the cooler months across autumn and winter typically see a decline in market activity.

Colder temperatures and shorter days may deter potential buyers from attending open houses and auctions, especially if it is unusually rainy or cold.

Seller sentiment may also wane, leading to fewer property listings.

This slowdown can be more pronounced in regions with harsher winter climates, such as Victoria, while warmer areas like Queensland we expect to see less of an impact.

Now consider Victoria, with its colder and more variable winter climate, experiences a more noticeable seasonal effect.

Buyers might be less inclined to venture out, and sellers may prefer to wait until spring or summer to list their properties.

It is likely some of the colder towns may experience reduced market activity and some supply issues when it’s cold.
There is an exception though.

Areas known for their cold climates might go through a period of heightened activity.

Think about the areas close to snowfields and snowy mountains that are buzzing with activity over the winter months and ski seasons.

We are likely to see more properties come onto the market, and more buyer activity because the properties will be shown off in their best light – with views over the snowcapped mountains or holiday homes listed for sale to show off how they are busy and booked over the winter months.

Sometimes visiting tourists love the location so much they start to investigate options to purchase a holiday home or even relocate if they love the area during their visit. There is more about this below.

Characteristics of autumn/winter markets:

• decreased buyer activity and fewer open houses in most areas.
• less motivation for sellers to list properties, unless in areas close to the snow.
• potential for fewer auctions and slower market pace.

Other considerations

There are always going to be exceptions to these rules. This is just the overall impact that seasonality can have on property markets, so it is really important to understand the market you will be buying in as well as how the seasons will impact that area.

Think about the below considerations:

Queensland

Queensland is known for its generally warm climate. Because it experiences milder winters compared to southern states, the colder climates won’t have as large an impact on the property markets here.

Because of its warmer weather, winter does not significantly deter market dynamics and many people who live in the southern states might consider relocating to Queensland into coastal cities like Brisbane and the Gold Coast that experience more consistency in the property markets, even during winter.

Property prices don’t drop as much during the winter months in Queensland, as the weather remains conducive to outdoor inspections and tourism.

Strategic considerations for property investors

If you are investing in property it is important to understand these seasonal trends so you can make informed decisions.

Timing the market:

Investors looking for better deals might consider purchasing during the winter months when demand is lower, potentially securing properties at reduced prices. Selling during the summer months can attract more buyers and potentially yield higher sale prices.

Region focus:

In warmer regions like Queensland, investing can be more consistent year-round, reducing the need to heavily time the market.

In colder regions like Victoria, investors might find better opportunities by targeting winter purchases and summer sales.

Specialty investments:

In ski resort areas, focusing on winter investments can be highly profitable due to the seasonal tourism boom.

Vacation homes and short-term rentals in these regions can provide substantial returns during the winter season.

Market adaptability:

Staying informed about local market trends and climatic conditions can enhance investment outcomes. Whether investing in steady coastal markets or booming winter resort areas, a nuanced approach to seasonality can significantly enhance investment success.