Most astute investors are pretty active in December and January, as this time of the year can sometimes present great investment opportunities.
Firstly, with vendors that want to sell urgently before Christmas, it is possible to negotiate a favourable purchase price if both parties can agree on a quick settlement date.
Secondly, it is common to see fewer buyers active in the market due to the pre-Christmas rush of shopping and festivities, and post Christmas with people taking a break or travelling because of school holidays and time off work.
With less demand, there is less competition, so more chances to secure the right property for the right price before the market picks up again in late January and early February.
But be mindful of buying where you holiday or snagging a holiday bargain. The key is to research before you buy!
Market Perfomance Indicators
Below are some market performance indicators that you should be looking at when evaluating where and what to buy these holidays.
- Median values - Look at the suburb’s median values for houses or units (depending on what you’re looking to buy) over the last 20 years to get a clear picture of how cyclical the market is in that suburb or region. Is there room for more growth?
- Comparable sales - When buying a property, it is vital to understand its market value by looking at the recent property sales in the area. This indicates what the property is likely to be worth, so you don’t end up overpaying.
- Median rent - research the suburb’s median rent to see how much you can expect for the property and what growth rate you can expect based on previous performance.
- Vacancy rates - suburb’s vacancy rate will tell you how hot the rental market is - obviously, the lower the rate, the better and less competition for you to secure a tenant. If the property is in a holiday hot spot, make sure the tenant demand mainly comes from the residents who live in the area and not holidaymakers; otherwise, you could risk vacancy periods during the low season.
- Growth drivers - factors such as population growth, employment opportunities and infrastructure investment in the suburb/region are good indicators of what the future might hold in terms of housing demand.
Looking at these stats will help you determine how easy it will be to keep your property rented and maximise returns and capital growth over time.
When buying property during December and January, be prepared for delays and setbacks as they are likely to happen. During holiday time, there are fewer people on deck to finalise loans, applications and contracts, so be organised as much as possible with finances and pre-approvals.
In the end, remember that Australia is not one property market, so there’s never truly the perfect time to buy! There will always be opportunities somewhere in the market when you have your finances ready to purchase the right property for you.
As a qualified property investment advisor, my goal is to minimise your risk and ensure you remain financially secure. If you are unsure about your choice of property or location and need assistance with sourcing, negotiating and securing the right property investment, don’t hesitate to reach out.
I can also introduce you to an A grade team of professionals, such as accountants, financial advisors, mortgage brokers, solicitors and property managers, to help you make informed and confident investment decisions.