October 6th, 2022
5 questions first-time Property Investors should ask
First time investors
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The holidays are the busiest time of the year, from gift shopping to hosting parties it’s a whirlwind. For some, that whirlwind is motivating and flows into other areas of their lives, such as renovating their home or purchasing a new one. The prospect of hosting your first Christmas at home, or starting the new year in a fresh space can be enticing. But it begs the question, is the Christmas period the best time to buy a property? To answer that we need to consider practicalities and historical data, keep reading to learn more.
What practicalities need to be considered when purchasing during the holiday season?
Beyond the intense heat that can be felt across many parts of the country this time of year, resulting in sweaty auctions and fatiguing move-in days, there are some other practicalities to consider. Due to the magnitude of public holidays in December and January, there are often delays in processing the sale of a property. So if you buy a property in December with hopes of moving in before the new year, this is something to consider and speak to your agent about.
On the other hand, many people are keen to move before the school year begins, with sellers having an appetite for moving quickly. Because of this, you may be able to snap up a quick deal, with less of the fuss and lengthy processes that are customary during the rest of the year.
What does the market behaviour show?
There are a few key trends to consider when contemplating purchasing a property during the holidays. Firstly, when we talk about market movement and stock, we can see that historically there is less stock on the market during this time of year. This can drive property prices up slightly, due to inconsistencies with supply and demand. This is exemplified by SQM Research’s data, showing that Sydney saw a drop in listings over the 2023 holiday period by 11,237 (when compared to the previous two months). This is noticeable by the slight price increase felt in Sydney during January 2024 with weekly asking property prices set at $1,941,379 before dipping to $1,885,752 in February 2024.
Is it better to buy in December or January?
Data would demonstrate that December shows more activity compared to January. Looking at the country holistically it was reported that in January 2024 the number of national residential property listings decreased by 5.7% from December. New listings also dropped by a staggering 17.5% in January 2024. This is typically caused by sellers wanting to get any loose ends tied up before the new year, seeing an influx in listings in December that drops in January.
Harry Bawa from SQM Research spoke on other contributing factors in 2023 that can affect both sales and rentals during this time. “The CBD regions showed the greatest movement as overseas students returned home at the end of the semester. And there were very small increases for Adelaide, Perth, and Darwin, showing that rental conditions remain tight [during the holiday period].”
So when is the best time to buy a property?
Let’s start by saying, there’s no short and sharp answer, as it’s dependent on many external factors. These can include unseasonal weather patterns, tourism events in major cities or regions and interest rate changes. With that being said insights from Realestate.com.au indicate that July may be the best time to buy. However, if you’re looking for an advantageous time to sell, November may be your best bet.
Are you a prospective first-time home buyer? Professor Peter Swan at UNSW spoke about the market conditions to look out for when starting your home-owning journey. He states that “first home buyers should be wary of buying into a rising market with a combination of high inflation and rapidly rising interest rates, as such a combination may lead to recession and rising unemployment. Vulnerable first-home buyers may be squeezed and unable to meet their repayments with their property being repossessed.” We also recommend taking a look at the homeowning initiatives that could help you.
Disclaimer: This guide is intended to provide general information and should not be considered professional financial or legal advice. It is essential to consult with qualified professionals to assess your specific circumstances and make informed decisions.
