Holiday breaks a good chance to reset the property mood of the market

Holiday breaks a good chance to reset the property mood of the market
Holiday breaks a good chance to reset the property mood of the market

The conversations we had with friends and family over the Easter break will shape the future of this year's residential market.

Pauses in the calendar - and our busy lives - always facilitate a review in our collective thinking.

Sometimes it is quite a marked shift, when we come back keen to buy, but other times the mood turns sombre.

It's the same with the Christmas holidays too.

It is not just these conversations that affect the market.

The calendar dictates, in many suburbs, just when sellers list and buyers buy.

Late spring is always saturated with listings, often so overwhelming the auction clearance rate stumbles into a very weak year close.

Mid-year school holidays and public holidays tend to be times when agents shy away from auctions, reasoning that buyers will be doing other things.

The early Easter break, with school holidays from mid-April, means market momentum won't really emerge until May.

Winter then approaches with many of the mindset that the colder months aren’t a great time to list.

The June long weekend traditionally marks when listings fall.

Many high end estate agents head off overseas for maybe July or August.

But some take a different approach.

"It’s true that there are often fewer people out and about in winter, but the ones who are looking tend to be genuine buyers," Ben Collier at The Agency reckons.

"When this combines with a lower number of listings, it means that the middle of the year can be a great time to sell."

This year kicked off with a slow, but positive start, for early birds after the Christmas break, but the Easter conversations would have noted recent strong listing numbers affecting price growth potential.

While it is good to guage the market mood and timing, it's important not necessarily to always follow the pack.

Indeed property investment is too driven by the herd mentality - and not enough about counter cyclical investing.

The herd mentality is where we are influenced by peers to adopt certain behaviours similar to others. It can be seen in our thinking to the stock market, nationalism and even home décor.

Of course the average home seller does not have the time to follow all the ebbs and flows of their property market.

With a family, full-time job, the footy tips and other priorities, the extent of property market research conducted by even fairly informed sellers or buyers amounts to little.

This leaves markets vulnerable to the herd mentality which as then Reserve Bank governor Glenn Stevens noted in 2015 meant some Sydney house prices were “crazy”.

Thankfully the current market sentiment has shifted away from over exuberance with price growth inevitably weakening. 

The new group mentality may very well save us all from the cliff.

This article first appeared in The Daily Telegraph. 

Jonathan Chancellor

Jonathan Chancellor

Jonathan Chancellor is one of our authors. Jonathan has been writing about property since the early 1980s and is editor-at-large of Property Observer.

Tags: 
Investment Strategy

Comments

Be the first one to comment on this article
What would you like to say about this project?