As the year draws to a close, house hunters who have been patiently waiting to strike this year may be presented with their best chance yet.
With the Sydney and Melbourne markets in the midst of a price correction, the month ahead could allow buyers to secure a home at a lower price than at any other time this year.
While most of us are preparing for the holidays or winding down at work, experts say many vendors are motivated to make a deal before the property market shuts down for Christmas.
December is a great time to be buying. Any owner that is on the market right now is on the market for a reason, and that should be that they’re willing to sell and willing to meet the market.
Real Estate Institute of Australia president Malcolm Gunning says Christmas is a selling deadline for many vendors. He says if vendors need to sell before the end of the year and have been conditioned to a softer market, it can create opportunities for buyers. This year, of all years, you’re going to be in the driver’s seat.
With tightened access to credit putting downward pressure on prices, a combination of motivated vendors and reduced competition among buyers means December is the time to negotiate hard to secure your next home at a discount.
How to tell if a vendor needs to sell
Buyers should actively engage with agents and ask questions to determine the vendor’s motivations.
If you understand the seller’s motivations that can really help you. Agents will often share a lot of that information with you quite freely.
Vendors facing a Christmas deadline may be more likely to accept offers below their asking price.
Getting an unconditional contract before Christmas could potentially save you tens of thousands of dollars purely because it’s the end of the year.
But although clearance rates are lower, desirable properties are still seeing strong competition. They may not be selling for what they used to but there’s still good buyers on them.
Personal circumstances can also often dictate whether a vendor needs to sell, or can wait for a better price in the new year. It can depend on whether or not vendors want get their kids into a new school zone or settled in a new area.
Be ready to buy
Flatter conditions mean buyers shouldn’t have a fear of missing out, but should still be ready to act when a suitable property becomes available.
If it ticks all the boxes, I would look to negotiate and make offers on that property. But it’s best to not put you best offer up front.
Buyers looking in December need to have pre-approval in place to allow them to move quickly.
Something could come up that you really like, and if there’s a desperation for a seller’s view, you want to be in a position to try and secure that property.
Those buying in December need to be prepared for how a January settlement might unfold.
If you’re going to buy in December, you’ve got about six weeks to settle so you’re going to settle in January. Make sure your lawyers are around and everything is in order with your home loan.
Avoid hasty mistakes
While buyers may see discounts in December, buyers shouldn’t rule out waiting until the new year. There might be new stock on the market, which could give buyers better choice.
Some vendors may be waiting until January to list their homes, while others on the market now would relaunch their campaign in the new year if their home passed in at auction.
Bargain-hunting buyers should avoid being fooled by deals that appear too good to be true.
Just because something is cheap doesn’t mean it’s a good investment. If a property is heavily discounted and sees minimal interest, consider why. It could be smaller than other properties in the area, on a busy main road, overlooked by neighbouring buildings, or receive minimal natural light.
Look at the underlying things that will cause the property to appreciate in value. That ultimately comes down to land, street, location and aspect.