Why buy before Christmas..........

Fiona Ruth
With presents to buy, trees to decorate, carols to sing and work to finish in time for summer holidays, why would anyone add buying a property to the before-Christmas to-do list? Bryce Holdaway, director of Empower Wealth (www.empowerwealth.com.au), and Veronica Morgan, principal of Good Deeds Property Buyers (www.gooddeeds.com.au), say it might not be such a crazy idea after all. They are co-hosts of The Lifestyle Channel’s Location, Location, Location Australia and Relocation, Relocation Australia exclusively on Foxtel. Veronica: “There are many reasons why it can be a good idea to buy before Christmas. Often other buyers get distracted by all the other events leading up to the silly season, so competition for properties can be less fierce than it is in late winter or early spring. And then many vendors really want their properties sold before Christmas, so motivation to sell is usually pretty high, presenting opportunities for savvy buyers.” Bryce: “Yep, I think it's a great time to buy too! It's counter-intuitive as most people are more focused on their gift shopping, the office Christmas party and the much-needed end of year break rather than buying real estate … but the buyer is in the position of strength at this time of the year! If the property isn't sold in the lead-up to Christmas Day it's highly likely the seller won't get a deal done until February, as the agents will be taking leave in January (they get very few options like this to take a break each year), and the buyers are focused on getting kids ready for a new school year, getting back in to the swing of things at work and generally not thinking about major decisions. So an opportunity exists for those who include ‘a new home’ on their Christmas shopping list.” Veronica: “Maybe in Melbourne the market doesn’t ramp up again until February, but in Sydney the market often starts with a bang right after New Year! There is no new stock so anything left over from before Christmas gets snapped up by new buyers entering the market, or by buyers returning to the market with renewed vigor after taking time out. So many people seem to make a New Year’s resolution to buy a property and then act on it right away! Then it can take a couple of months for enough new listings to come onto the market to satisfy this renewed demand. As a result, we often see prices spike in the first few months of the year by up to 5 per cent, another reason not to dally if you find a great property before Christmas.” Bryce: “C’mon Veronica, there are other markets outside of Melbourne and Sydney ;-). So if you want to jump on a property in the lead-up to Christmas, keep the following points in mind: Opportunities * Fewer people equals less competition, which means greater flexibility in negotiations and a better chance at securing deals. * Potential for lengthier conditions and the term “business days” takes on a whole new meaning during this period with so many public holidays. * Motivated agents want to get a quick deal done, given a large chunk of their “listing period” is taken up with public holidays and festive distractions. * If buying for investment, a January or February settlement means you settle during peak rental season. Pitfalls * Timing: ever tried to get a building inspection done at that time of the year or have a repair done by a tradesman? This needs to be factored in. * Smooth settlement: the key members of your team will be winding down too, i.e. your lender, your solicitor, your accountant, your builder, and so on. It’s not a barrier to purchasing, but you need to check their availability in advance.” Veronica: “All that said, there is no point in buying anything if it is simply to try to take advantage of an opportune time to buy. If you can't find a good property to buy, don't buy. I would rather pay market value in a hot market for quality real estate than get a bargain if the property is a substandard investment, or really does not suit your needs for a home.” Bryce: “Always the realist Ronnie, but a very good point indeed ... unlike the unwanted t-shirt or the household appliance that you can return after Christmas armed with a receipt, you won’t get a ‘refund or exchange’ if you change your mind about the property you bought before Christmas.”