A little ray of sunshine
Despite the world being dominated by digital, with artificial intelligence on the rise, and an app for practically everything – our property buying decisions are still influenced by the weather!
The sheer volume of information at a property buyer’s fingertips is overwhelming – there are property market reports from every conceivable source, news reports, blogs and chat rooms, advice from experts and those who just think they are, apps to use and virtual reality tours to take… the list is endless. And yet, when it comes time to make a purchase, if it’s a sunny day they are likely to pay more.
Researchers at the University of Technology Sydney have found that there is a link between the weather and how much buyers are willing to pay.
By comparing the sale price of more than 800,000 Sydney properties between 2000 and 2014 and comparing the sales with the corresponding weather data from the Bureau of Meteorology, the study found that sunny days can boost auction prices.
“Weather is known to affect mood, and some studies have shown a link between the weather and stock prices, so we decided to look at weather and house prices”, said Dr Adrian Lee, Senior Lecturer in Finance at UTS Business School.
Auction prices were compared with factors including temperature, rainfall and solar exposure, as well as consumer sentiment survey data. It was found that whether it was sunny or cloudy was the dominant factor, rather than the temperature or rain.
A sunny day increased the auction sale price by 0.974 per cent, or nearly $11,500 based on the median Sydney house price of $1.178 million.
Higher auction prices were also achieved on warmer days, with the study revealing that a day with a 10 degree higher maximum temperature resulted in a 0.635 per cent (or around $7,400) increase.
On the other hand, if it was rainy, the auction prices were dampened, realising 0.174 per cent (or about $2,050) less than on a clear day.
The take out for landlords and PMs? While the study focussed on home sales (auction prices), the psychology behind the correlation between weather and pricing could be translated into the rental market. Plan to list homes and hold open for inspections on sunny days and you may see tenants willing to pay more rent.