Summer guide to real estate and how buyers can make it their time to shine
Summer has a reputation as real estate’s ‘off season’. But it might actually be buyers’ best chance to get a bargain — and to beat a looming interest rate rise.
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Real estate markets used to shut down over summer, but with lockdowns forcing sellers to be more flexible in recent years, the heat is straight back on after Christmas.
PropTrack figures tracking listing numbers from December 17 to January 26 across the past three years show Sydney, Melbourne, Brisbane and Adelaide had anywhere from about 75 per cent of a typical listing volume from across the year to more than 91 per cent.
Meanwhile, the percentage of buyers still active at this time has hovered at 80 per cent to 90 per cent since 2020.
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We asked market experts how buyers and sellers can turn summer into a hot property opportunity.
RATING A SUMMER SALE
PropTrack economist Paul Ryan said listing and buyer activity figures for the past three years showed, on average, the quiet period was only down 13-15 per cent from typical levels during the rest of the year.
And for those who push on in the next few weeks, there could be an added bonus with the Reserve Bank of Australia unlikely to touch interest rates again until February – when it will have more data on how inflation is tracking.
“The risk of rates rising substantially has now subsided, so there’s less risk for buyers now,” Mr Ryan said. “And if you are reading the tea leaves and think rates aren’t going any higher next year, that has historically been a very good time to buy – when rates peak and before they start to fall.”
With few new listings appearing at this time of year, he conceded most of those on the market now had failed to sell earlier in the year.
“But there’s no such thing as a bad home, just bad pricing,” Mr Ryan said. “And this is traditionally the time when vendors will realise this.”
REALTY REALITY
Buyers Home Base founder and flat-fee buyer’s advocate Julie DeBondt-Barker said her firm made a point of trying to buy when most people were taking a break.
“There’s always been this thing that you have to sell by Christmas,” Ms DeBondt-Barker said. “So if something hasn’t sold by then, the owner will probably want to offload it pretty quick.”
But buyers needed to ensure they were really ready to go, including checking in with their conveyancer or property solicitor, as well as building and pest inspectors, to know when they would not be available.
“And with all the recent interest rate hikes, make sure your borrowing capacity hasn’t shifted,” Ms DeBondt-Barker added.
Settlement terms are also important at this time of year, as banking teams will take time off. But a transfer date in February could give you the chance to buy now and worry about the financials later.
SPOT A SUMMER BARGAIN
Ms DeBondt-Barker said auctions at this time of year could be a chance to buy well as vendors, feeling the pressure to get a sale done before Christmas, might be more likely to set a lower reserve or revise their expectations if the auction stalled.
“And anything that has been passed in at auction, whether it’s a family home or an apartment, if it has not sold by Christmas, there’s a very good opportunity,” she said.
In many instances a perfectly fine home will fail to sell if the vendor has set their price hopes too high. One with a recent price reduction could be a gift for savvy summer buyers.
Ms DeBondt-Barker advised former investment properties, particularly apartments, could have owners selling in response to this year’s interest rate hikes, but only now becoming realistic about price.
She said buyers should be asking agents if the vendor was ready to sell at a realistic price to meet the market.
“And put a time limit on any offers; and say, ‘I want a holiday’ — then be firm about that,” she said. “And once everything shuts down at Christmas, vendors will pretty much lose 30 days. So you might point out that taking an offer now will save the seller on marketing and staging costs for a month when their home could just be sitting there.”
Finally, Ms DeBondt-Barker said that homes not sold by January could be taken off the market as unsuccessful vendors planned their next move.
Asking agents about properties that have “fallen off the market” could give buyers a chance to negotiate. It could also pay to inquire about upcoming listings as there might be a chance to beat other buyers to making an offer.
A GOOD TIME TO SELL
Despite the scope for buyers to cash in on sellers accepting reality, canny vendors can also make a move on buyers facing a new year hunting for a home.
Ray White head of performance Bianca Denham said the firm’s Nowra office in NSW was planning a 50-auction event for Christmas Eve.
In Victoria, the Ferntree Gully agency will launch a series of homes for sale either side of Christmas.
Ms Denham said past instances of festive listings had led to strong inspection numbers, with buyers who had missed out in spring often still hungry for their next home.
“The ‘off season’, as it’s been described, when activity in the world of real estate drops, could possibly be the absolute best time to capitalise on a captive audience,” she said.
“The momentum to get a deal done at this time of year is there. Buyers just want to draw a line under it, and that speeds things up leading up to Christmas.”
SMART SUMMER REAL ESTATE TIPS
+ Confirm when your building inspector, conveyancer and mortgage broker are working;
+ Check your borrowing capacity has not changed after the December 6 interest rate rise;
+ Plan settlement dates for when bankers will be back at work;
+ Ask agents if their vendors are ready to be realistic on price;
+ Put time limits on any offers you make to keep the pressure on the seller;
+ Look for homes that have passed in at auction, or had their asking price reduced;
+ In January, ask agents about homes that were pulled off the market at the end of last year or will be on the market soon; and,
+ If new listings do emerge, move quickly before other buyers come back from holiday.
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Originally published as Summer guide to real estate and how buyers can make it their time to shine
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