It’s raining, it’s pouring and auction day is dawning. Wet weather can really hamper people’s recreational pursuits but does it have an impact on the selling price of a property on auction day?
Rainy days drive prices down
Unfortunately for sellers, adverse weather conditions tend to thin out the crowd at auctions. A lack of competition during the bidding process can cause selling prices to fall below the expected result that sellers are hoping to see on auction day.
According to a study completed by University of Berkeley using data from Melbourne, cloudy days drive prices down by an average of 2.8 per cent. If it actually starts to rain, prices are driven down by an average of 5 per cent.
The reduction in price associated with rainy weather tends to be most prominent when there is at least 4mm of rain. While a 5 per cent reduction in selling price may not seem significant, consider that a home selling for $1 million on a sunny day would sell for $950,000 on a rainy day.
What does this mean?
For buyers, a rainy day may be the best day to score a good deal at a property auction if there is a lack of competition.
However, sellers don't have the luxury of scheduling around the rain. It takes time to get a property submitted for sale at auction, so the only choice that sellers have is to hope that it doesn't rain when the big day comes. Putting a property up for auction during the time of year that is least likely to be rainy in a specific region can help to alleviate some of the risk of running into bad weather on auction day.
If you would like further advice on purchasing property and securing your dream home please contact the team at Mortgage Choice Blaxland & Penrith on 02 4739 9749 or email firstname.lastname@example.org