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Empower Wealth Blog post by Empower Wealth

‘Tis the Season to be Jolly!

Typically over winter, prospective sellers brace themselves for a spring sale and hold their property back from the market until spring starts up. For a buyer, this can feel as though the property supply in winter is very slow and available houses to inspect are limited. All of a sudden, September and October hit and there are multiple suitable properties for them to choose from.

As an example, in a specific suburb where a buyer is looking for a specific house alongside other buyers with a similar checklist, a target property can sell at auction for an impressive result if its ‘scarcity’ value is high enough.

It may be a scarce property in its own right, but if it is the only property of its kind on the market at the time, then a sea of buyers will ensure a great result for the vendors.

Counter to this however; if vendors hold a beautiful and niche property back for sale until spring and then find themselves competing for buyer’s attention. The result that they are expecting may not be met. It’s not necessarily that their property is only worth $X, but it may be only worth $X in this market at this time due to competing properties.

Now if we overlay this effect with yet another obstacle for vendors, things become even more difficult when it comes to achieving a great price for their niche property. Aside from having too many competing properties on the market, a nightmare for any vendor is to be facing a reduction in the number of buyers in the market.

There are two significant events in Melbourne which slow down buyer numbers.

The first is grand final (and we spoke about that in our October newsletter), and the second is Christmas. Melburnians love to get away from the pressures of work, city-life and property purchasing when the Christmas break approaches. We have a long summer break and we tend to use it to ‘escape’. The effect of our escape on the property market though is detrimental for vendors and can make the difference between a fair market price and a disappointing price.

When we spoke earlier about ‘overlaying’ obstacles, the combination of excess property supply on the market and a decrease in buyers can be disastrous for property sales campaigns. If there is any one time of year when this can take place, it is often over the Christmas and early new year period. Some of the best buying opportunities we’ve ever come across have been on those couple of weeks leading up to Christmas and over the January period when everyone else is enjoying their summer holidays.

There are two reasons for this—firstly, vendors in this market generally have a motivation for selling. They may have already committed to a purchase elsewhere and as a result of the upgrade, need to sell. They may have financial pressures and have made the decision to sell now. These vendors have a pressing need to sell and are most likely fearing that Christmas will come and they still won’t have a buyer. For many vendors, the festive season represents a dawn, or a futuristic date whereby they would like the pressure of the pending sale to be eased. I refer to it as a psychological date pressure that may not be driven by anything other than a desire to see in the new year with a SOLD sticker on their property board.

The second reason for this period to present a great buying opportunity is that the property market almost dries up. Buyers are conditioned that auctions don’t take place over Jan. Agents flock in droves to take their annual leave. The market is quiet and all that remains are the properties which haven’t sold pre-Christmas and the buyers who are smart enough to recognise that it’s a great time to be shopping without competing buyers breathing down their neck.

One thing to keep in mind—agents will be on leave so be organised with your time when arranging private inspections with the skeleton staff who are remaining in the office. And don’t forget to take some time off to have a great Christmas and NYE!

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