- Christmas and New Year is usually a quiet time for the real estate market
- However, some sellers may be keen to strike a deal before the end of the year
- The process can be made slower as solicitors and the like are on holidays
While there is typically a mad rush leading into Christmas with buyers and vendors wishing to secure a deal, once the markets pass Christmas, the period until New Years is traditionally a quiet time.
This is due to most real estate agents an other professions in the sector taking a break while the market slows down.
“For many buyers, all they want for Christmas is a home,” said Lloyd Edge of Aus Property Professionals.
“What this means is, that if you are a savvy investor there are multiple factors that are unique to the festive season that can help you secure the right property for your needs as long as you understand the markets and do your research.”
So, what happens to the Australian property market during this time?
The lead up to Christmas, like the retail sector, is one of the busiest times of the year for real estate.
“It seems that sellers really want to have their property sold by Christmas and a new home is on many buyers’ Christmas wish lists,” continued Mr Edge.
“Many sellers don’t want to risk waiting for the new year to sell their property, as there will be more properties (meaning competition) entering the market. At the same time, the buyers are often pre-occupied with planning holidays and Christmas festivities as well as tightening their budgets, so that also impacts the activity in the property markets.”
Lloyd Edge, Aus Property Professionals
He suggested that if you are looking to buy, it is a great time to purchase property as vendors become increasingly nervous and desperate to sell before the shutdown period, therefore they are more flexible with price and contact terms.
So, why do sellers get anxious selling their property around Christmas?
Given there are difficulties in selling a property leading up to and just after Christmas, there is great uncertainty with buyers as they become distracted with pre-Christmas festivities and planning their vacation period.
The main reason sellers don’t want their properties sitting idle during this time is because when the new year arrives, the property will appear as an old property with long days sitting available for sale. This gives the impression there must be something wrong with the property. Also, new properties will be entering the market, thus increasing competition among sellers.
Also, sellers will feel like they have held onto their property for longer due to the calendar ticking over.
What are the advantages for property buyers around Christmas and the New Year?
As mentioned above, the period leading up to Christmas and the New Year can create some unique investment opportunities for buyers.
The buyers can benefit from the sellers eagerness to finalise a deal before the year’s end.
“Sellers do not want their property sitting on the market during the shutdown period making it look like a stale property so this creates a rush and urgency for sellers to offload their property,” explained Mr Edge.
Investors can nab a bargain thanks to less competition. However, solicitors, brokers and banks will also be busy with a high influx of applications and clients pushing to settle before Christmas.
“These professionals may also close their offices during the Christmas and New year period which can cause delays in exchange and settlement,” he added.
Advantages for property buyers:
- Sellers become desperate to wrap up a deal before the year’s end
- Sellers become more flexible with both price and contract terms
- Less competition from other buyers as they become distracted with Christmas festivities and holiday planning
Disadvantages for property buyers:
- Professionals become busy and go on holidays so the process can be slow
- Less choice as some sellers may choose to hold off selling altogether until the new year
So, what happens in the new year?
With all the Christmas and New Year distractions out of the way, the property market is expected to rebound with buyers returning in January and February.
“This creates more competition if you are a buyer making it more difficult to negotiate on price,” continued Mr Edge.
“Typically, we will see new sellers enter the market increasing supply and options for buyers as some sellers wanted to hold off until the new year before listing their property.”
In summary, Mr Edge warned that property market are run by the basic economic forces of supply and demand, which can vary from market to market.
“It is important that before you add property investing to your Christmas to-do list, that you study the movements of the market and engage with professionals, to determine whether this is the right purchase strategy for you,’ he said.
