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Have you ever heard the term spring selling season? Like spring is the best time of the year for property transactions. So does this mean there's a better opportunity to buy in winter? As always, the details are found in data. Let's unpack one market during several times and zoom into the stats in a way that's potentially never been done before to understand if buying in winter can actually get you a better deal.
My name is Jiuma, lead research analyst at InvestorKit, and now let's get into it. So in this episode, we're gonna try and answer three questions. One, do you really face less competition buying in winter? Two, do properties really sell slower in winter? And three, do you really get more negotiating power in winter?
So now the first question, do you really face less competition? Many people believe that there are less buyers in winter looking for properties. So naturally you face less competition. But is that so? This chart shows greater Adelaide's inventory level together with its number of property listings and property sales from August 2022 to February 2025.
And this period covers two winters, the 2023 and the 2024 winter. As you can see, as the number of sales in winter does decrease, the number of listings, the properties available to buy also decreases in winter. So as a result, the ratio between listings and sales, which is inventory, is actually much lower than it is in autumn and spring. So the answer to this question would be, well, you are really facing less buyers or less competition. The thing is, you're looking at fewer options as well, because a lot of sellers, they actually want to wait until spring to list their properties.
So do you really face less competition? Not really. While you are indeed competing with fewer buyers, you are actually competing for much fewer available properties as well. So the reality is competition is still there. It's not as low as we may think.
Then the next question is, do properties really sell slower in winter? To answer this question, we want to look at two different types of markets, a more active one and a more inactive one. To make it fair, we are just looking at one single market, which is greater Adelaide. We're just looking at different periods of greater Adelaide when it's active and when it's not so active. The active period we're looking at is from 2021 to 2023.
This period covers three winters. In the 2021 winter, Adelaide was just starting to feel the heat and days on market at that time really stayed stable across June, July, August. It wasn't really different from the autumn before that. In 2022, as we all remember, the RBA started increasing the cash rate from May and the winter, June, July, August was just at the beginning of a series of interest hikes. At that time, consumer confidence dropped really significantly.
So as a result, we see this increase in days on market over that winter. And then the 2023 winter, situations were different. In 2023, we have experienced a lot of interest rates increases. Property buyers have got more used to the high interest rate environment and more demand was driven to affordable markets such as Adelaide or Brisbane. So as a result, Adelaide's property market heated up again in 2023.
And in the winter of 2023, we actually were seeing declining days on market throughout June to August. And it continued in the following spring. So as we can see, in a very active market, seasons don't really have much impact on days on market. Instead, it's the consumer confidence, demand and supply that really affect how fast properties are sold. And then how about in an inactive market?
For this one, we look back further to 2016 to 2018 in Greater Adelaide. This period again covers three winters from 16 to 18. In those period, we see clearer patterns of days on market change over the year. In summer, there's always a spike. And in winter, there's always a slight increase through June to August, as is shown in this chart on the screen.
So do properties sell slower in winter? It's a yes or no. In an active market, it doesn't really matter much. Instead, the consumer confidence, demand and supply, their impacts are actually more significant than the seasons. However, in an inactive market, the seasons do make a difference.
And the third question is, do you get more negotiating power in winter? For negotiating power, what we want to look at is vendor discount. And again, we use Greater Adelaide's active periods and inactive periods. In an active period, we do see vendor discounts fluctuate more month by month. In this chart, we do see a spike in each of these winters, especially in 2022 when consumer confidence dropped after the first rate rise.
In 2021 and 2023, we do see some spikes during winter, but they are not as significant as we can see. These fluctuations are actually very much similar to the fluctuations happening over other seasons during the year. And then how about in an inactive period? Greater Adelaide from 2016 to 2018. Fluctuations are much milder in these inactive periods compared to the charts we have seen just a moment ago.
Vendor discount fluctuations are much milder during the inactive period compared to the really active periods. And in winter, we do see some increases from July to August. But again, these fluctuations are actually very much in line with what's happening during other seasons. So it's really hard to call this correlation significant between the winter season and the increase in vendor discount. Now, do we get more negotiating power in winter?
The answer is no, unless it is a time when consumer confidence drops significantly. So to summarize, in winter, you don't really face less competition because while there are fewer buyers, you're actually facing much fewer options too. And in winter, if the market is active, properties do not necessarily sell slower. And you may get more negotiating power when the consumer confidence suddenly drops a lot, but that has nothing to do with the winter season. So all in all, if someone's told you that winter is the better time to buy, unfortunately, the data doesn't agree.
The best time to buy property is yesterday. And the second best time is today. Property investing is all about time in the market, not timing the market. So when you're ready to buy and you have a strategy to move forward with, that's when you need to start looking at a purchase. Whether it's winter or summer or spring, it doesn't matter.
I'm Jiuma, lead research analyst at InvestorKit. If you enjoyed this episode, make sure to hit subscribe or follow if you're on iTunes or Spotify. I'll see you in the next episode.
