Tis the season to nab a bargain - November 2018
November 25, 2018 / Written by Rich Harvey
I agree with famed crooner Andy Williams – It really is the most wonderful time of the year.
There’s a buzz of excitement in the air as Christmas approaches, providing a sun-soaked celebration before this year finishes and a new one begins. People are happy as they rush about their days.
You can’t help but get caught up in the magic that December brings… unless you’re trying to sell a property.
And for vendors, this year is going to be especially tough – which makes it a great time to be a buyer. You could find yourself walking in a real estate wonderland.
Alright, that’s the last Christmas carol pun, I promise.
But should you find yourself in the market this month, what kind of good deals can you expect? Who are the sellers you’ll encounter and what can their situation mean for your negotiations? And where should you look for the biggest bargains?
Let’s have a look.
Lousy for some
December has always been a notoriously tough time to be a vendor. People are distracted. They’re busy getting ready for the holiday season and all that it brings – visiting relatives, packed shopping centres, the mad rush to finish work, screaming kids on school holidays and lots of present-wrapping.
Things really quieten down, especially with all of those public holidays that kick off from the end of December.
Typically, vendors don’t choose to sell at this time of year unless they have to. But this year, Australia’s major property markets haven’t offered a great deal of choice to sellers. There’s every chance those who find themselves with a house on the market in December have had it on the market for quite some time, unable to find a buyer.
Markets in many cities have softened over the past 18 months, but particularly in Sydney and Melbourne. The time it takes to sell has blown out, as would-be buyers disappear and offers drop well below what they were not long ago.
The vendors you’re likely to encounter next month are ones who are well and truly over it. They’ve probably been living the Groundhog Day of open inspections, low ball or no offers and waiting by the phone for months now. And as 2019 approaches, they want a deal.
Most investors will have the luxury of being able to hold, so you probably won’t find many of those in this group. Retirees are also more likely to delay cashing in on their bricks and mortar wealth and turn to other assets to wait it out.
So, the sellers in this more pressing bracket are families and upgraders. Many will have bought elsewhere or be in the process of planning their leap and will want to get a ‘sold!’ sticker slapped on their current home.
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December stretches to February
Think about how your life plays out over the next few months. The lead-up to Christmas is absolutely manic. New Year’s is fun and chockers with social commitments. January is lazy and spent at the beach, in the park or away on holiday.
Before you know it, it’s Australia Day and you’re barbecuing or heading down the coast. Then, it’s back into the swing of work and school for the kids. Eventually, when you’re ready to dive back into the real world and your normal life, it’s February.
Now, imagine you’re selling a house. If you thought December was tough, get a load of January. Most real estate agents are away until the second week of the New Year and buyers take much longer to re-emerge.
It could be longer this time around, with the heat taken out of the market removing the sense of urgency for those looking to purchase property.
That makes it all the more important for sellers to get ink on a contract before the year is out.
Prime pockets ripe for the picking
Upgraders will form a big part of December sellers keen to get a move on and begin 2019 with a weight off their shoulders. Those selling their first or second home to upgrade to something bigger and better are likely to be in well-located, middle-ring suburbs of the capital cities.
These types of properties are terraces and townhouses, small cottages and two or three-bedroom apartments. They’re hardly bargain bin duds. They are prime pieces of real estate that are going for a relative steal compared to what they would’ve two years ago.
In a hot market, these listings wouldn’t have lasted. Just as quickly as the new properties hit the internet, they were under contract. Or they’d go to auction and the sellers would watch the resulting feeding frenzy with glee.
But those days seem like a distant memory for now, and today’s vendors have to increasingly take what they can get. With the looming Christmas and New Year period, they might be more inclined to think realistically about the offers put in front of them.
Closer to the city, there’s another opportunity to sniff out a bargain in the form of new or very recently built dwellings. Projects have wrapped up and units and townhouses in hot spots very close to the CBD are hitting the market in flatter conditions to when construction began.
Developers are keen to get out, knowing that every day they hold on to stock is costing them money. If you want something brand new with all the frills and features, but for less than you’d ordinarily pay, this is a fantastic place to look.
The pendulum has swung back
After years of vendors in most markets holding all of the bargaining chips, the power is increasingly in the hands of buyers. You can get a fairer price and more favourable conditions in this current climate.
But you can also offer terms to sellers keen to get a contract that will sweeten the deal at a bargain price. Think a shorter settlement period so they can hit the road, or a longer one if they want a sale without the hassle of removalists at Christmas. See what value add extras might convince them to play ball.
Of course, if you want the best read on the market this December, it will pay handsomely to have an experienced buyers’ agent in your corner. They’ll spot those sellers under stress and ensure your gift this Festive season will house the Christmas tree, not be under it.
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