Is Christmas a good time to buy and sell properties?

By Bianca Dabu 23 November 2018 | 1 minute read

The period between Christmas and New Year is often considered a ‘downtime’ for the real estate market, but some experts believe that there are unique investment opportunities during this time. Should investors incorporate the holidays into their strategies?

Santa Claus with big gift

Buying and selling properties before, during and directly after Christmas could be a tricky strategy to implement, particularly due to time constraints and the unpredictability of demand. However, for investors who are determined to stay active in the market, it could be as good a time as any to grow a property portfolio or add value to an asset base.

According to property expert Rory O’Rourke: “A window of opportunity presents itself for astute property buyers leading up to the weeks prior to Christmas.”

“Traditionally, sales activity in the housing market slows during this period as people become distracted with Christmas shopping and planning their holiday vacation. However, after the Christmas period, the property market rebounds strongly during January and February when buyers flood the market.”

Whether or not the ‘Christmas strategy’ fits into their long-term investment plans, investors are strongly advised to study the movements of the property market before making any major financial and investment decision.

Buying: More bargains, less time

One of the advantages of buying a home in December is the eagerness of sellers to finalise a deal before the end of the year in order to avoid the influx of home listings as the new year begins. Therefore, they might be more open to accepting lower offers provided that the buyer will move quickly and settle early. Sellers may also willingly offer bargains on the outset.

Some buyers can be lucky and pick up residual stocks as other buyers drop out of the market. Properties that ‘go stale’ over the holidays and fail to get sold at auctions or private sales may be bought for lower prices.

Vendors who have properties scheduled for February auctions may also be willing to sell their assets if the buyer presents a compelling offer. Take time to research on properties on sale to maximise your choice and leverage.

If the level of competition in the market is weak, which is usually the case during the holidays, buyers are highly likely to secure their desired property for a good price.

On the other hand, some markets may just be more crowded than others. Buyer’s agents often consider the Christmas season as one of the busiest and most exciting times of the year since the challenging conditions of the market bring out the savviest investors who are motivated to snag the elusive holiday bargain. In the case of high demand and low supply, prices could be driven up.

Buyers should be also wary about managing and organising their finances during this time, as well as going through the pre- and post-settlement processes.

The holidays often see banks taking longer to process mortgage applications due to a higher influx of properties to settle before Christmas. Solicitors, mortgage brokers and other necessary service providers may also be closing their offices around mid-December to mid-January, which may cause significant delays on the settlement process. At the end of the day, the time-consuming nature of a property purchase may deny you of the chance to enjoy the festivities of the holiday period.

Ultimately, buyers are advised to have realistic expectations about finding and closing deals during the Christmas seasons. Aside from researching possible bargains, they should also make the effort to assess the timing involved in the whole process—from negotiation all the way to settlement, which could take weeks up to a month or more.

Selling: Small market of (possible) low ballers

Property sellers can meet different types of buyers during the holiday season—from the frustrated ones who have been looking for a property since the beginning of spring to the motivated ones who are keen to snag a bargain, both of which offer advantages for vendors.

Frustrated buyers can end up paying for more in order to secure a property before the end of the year in order to avoid the rush in the property market as the new year begins, while the motivated ones will have to deal with less stock and, therefore, relatively higher prices, particularly in high-demand markets.

Buyers who are willing to sacrifice merriment for property negotiations are usually serious about their need to purchase, which could lead to a quick sale. The end of the year is also a common time for rental leases to end, which will have a lot of people working out their next move. People who are on the move often have their attention to the market, which makes it easy for vendors to market their property.

As there are fewer properties in the market by the end of the year, sellers can easily make their property stand out from the crowd, enticing motivated buyers without having to deal with too much competition. The merry atmosphere is also likely to inspire good moods and, therefore, good negotiations and easier processes for both parties.

Conversely, vendors can be disadvantaged in various ways, particularly in terms of timing.

Most buyers have withdrawn from the market by late November, significantly narrowing your market. The remaining ones are likely to be open to longer negotiations and settlement considering the time constraints of the holiday period, which is not ideal for sellers looking to close a deal as soon as possible to avoid the influx of housing supply by January.

Solicitors, mortgage brokers and other necessary service providers closing their offices around mid-December to mid-January may also significantly delay the settlement process.

For those who are keen to sell their properties in Christmas, consider private treaties over auctions as the transparency of the latter could allow for faster transactions and encourage frustrated buyers to make offers.

As such, do your best to avoid caving in to low ball offers. A lot of prospective buyers will be looking to find bargains as a way to take advantage of the season. Remember: While there are few buyers in the market, there are also few sellers during this time. Someone eager to purchase will eventually come along with a decent offer.

Like any other time, presentation plays a big role in selling a property during the holidays. Make sure that the place is uncluttered, tasteful and fit for your target market so it’s easy for prospective buyers to envision themselves living in the property.

Take time to consider the opportunities in the market to avoid having your property up for sale for too long. Vendors who sell at the wrong time may suffer both short- and long-term consequences of lower profits and prolonged negotiations.

At the end of the day, supply and demand will vary depending on the market you are trying to buy or sell in. Before ultimately adding property investment in your Christmas to-do list, study the movements of the market and engage with professionals, where appropriate, to determine the opportunities worth snagging during the holiday season.

 

This information has been sourced from Domain, realestate.com.au, homesales.com.au, Century 21, Cohen Handler and the Smart Property Investment website.

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Is Christmas a good time to buy and sell properties?
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