How Christmas can warp the real estate market

Christmas can have a strange effect upon a lot of things, including the housing market. This is how to make sense of it all.

They’ve made a list, checked it twice and over the next four weeks, some lucky buyers will snag the best Christmas gift of all – a new home.

While many people start to wind down, some buyers are getting busy in the hope of scoring a property bargain before the year’s out.

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But is pre-Christmas a good time to buy? And how can you use the festive season to your advantage?

We asked the experts.

THE SANTA FACTOR

For many sellers, the impending arrival of Saint Nick and the family get-togethers he brings
can be a big motivator in wanting a sale.

“A key driver behind this preference is the need for both financial and logistical certainty as the year draws to a close,” Real Estate Buyers Agents Association (REBAA) president Melinda Jennison says.

“Sellers may prioritise finalising the property sale to embark on the new year with clarity and fewer uncertainties, enabling them to proceed confidently with their future plans.”

Home sellers might want to begin the new year with clarity and move on from their property before Christmas. Picture: iStock.

For buyers, this can mean a more flexible opportunity to negotiate terms.

Ray White Williamstown director Joanne Royston says buyers with finance sorted and attractive settlement terms can use this to their advantage.

“We encourage all buyers to make an offer prior to auction,” Royston says.

“Not all owners are open to it but you can often jump in and knock out some of your competition.”

LESS COMPETITION

Another bonus is the decrease in demand from other buyers.

Many home-hunters put their plans on hold as festive parties and holidays take up days in the calendar.

For the savvy home shopper, this can be prime time to buy.

“This scenario can offer negotiation advantages for buyers in certain cases,” Jennison says.

“Sellers often prefer having certainty as the Christmas holiday approaches.

Streamline Property Buyers managing director Melinda Jennison

Even if a property hasn’t finalised its sale, having a signed contract in place provides sellers with a sense of assurance and clarity about their plans as they enter the new year.”

Royston agrees but warns there is also a dip in the number of listings.

“Usually, during that Christmas period, we don’t see a lot of listings come on – so I’d be jumping in now before next year and before the next interest rate rise (if there is one),” she says.

Royston’s office has six auctions scheduled for December 16, the last big weekend of auctions before Christmas.

SLEIGH TIME

So when it comes to buying before Christmas, how do you find – and finalise – a bargain?

Jennison suggests having a chat with the selling agent, plus being extra observant at open inspections.
“Check for indicators such as empty wardrobes or the absence of food products in the pantry,” she says.

“This method can provide valuable insights, potentially revealing if the seller has already moved on and is thus committed to selling.”

Royston says understanding the vendors’ situation was key.

Ray White agent Joanne Royston says buyers with finance sorted and attractive settlement terms can use it to their advantage coming into Christmas.

“Ask key questions of the agent: will the owner consider selling before auction; are they open to a quick settlement; what are their motivations?” she says.

“If they’ve already purchased something else, and a buyer can match their terms, they may be more inclined to take the offer.

“There’s lots of buyers out there looking but not as many out there willing to act.”

1. Ask questions. Find out via the agent if the seller has any particular motivations to sell that you can use to your advantage.

2. Offer sellers flexible rent-back options to ensure the certainty of the sale while alleviating the uncertainty of relocating before finding another home.

3. Engage in negotiations for shorter or extended settlement periods to eliminate the uncertainty or provide financial closure to the seller.

Source: Real Estate Buyers Agents Association (REBAA) president Melinda Jennison and Ray White Williamstown director Joanne Royston.

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