Don't cool your heels in winter

Don't cool your heels in winter
Don't cool your heels in winter

With the autumn property season over and the end of the headlines about record prices and huge crowds, the winter property season brings a new set of challenges for buyers and sellers. Yes, it’s a more subdued time, but winter can still throw up some surprises – and some opportunities. Even in winter people still need to sell their homes. And plenty of people are still out there looking for homes to live in.

In fact, on good homes the interest can actually intensify due to lack of supply, and prices can go up on certain offerings. We’ve noticed in the past couple of chilly weeks, our demand indicator Bidderman has risen to an average of 1.5 bidders per auction – up from just over one bidder per auction in early May.

So the buyers are still out there, but they may be a different crowd than the ones you’ve been bidding against during the spring and autumn property seasons.

You won’t see much of the wow buyers, for instance, the ones who like the glitz and glam and are “sort of looking” but not that hard. The footy is on, it’s too cold. They can’t be bothered. So you won’t have to worry about competing against this lot.

The desperate buyers are still there, though, the ones who really need a home nowbecausethe wife is threatening divorce, the kids are whingeing, and they’re sick of trawling through the internet listings every week.

The measured buyers never went away. These are the ones who don’t care whether it’s summer or winter, a buyers’ or a sellers’ market, freezing cold, roasting hot. They are out there even now looking for a quality family home that has good land content and represents good value close to schools for their kids. Their finances are in place, and they see the depths of winter as good a time as any if the right home presents itself.

Measured buyers are the ones who accept that it might be a little tougher to sell their existing homes, and realise they might need to discount their asking price a little for safety – but also that they’ll probably be able to buy something bigger and better at a better price. These are the ones who are only buying if the three Ps line up: property, position and of course, price.

Then there are the opportune buyers or investors. A bit of frost on the local oval isn’t going to stop them looking.  They’ve got their eyes on the pass-ins on a Monday. In fact, they’ve probably been keeping records of pass-ins for the last few months, and eventually a phone call will unearth a good home that didn’t sell for one reason: it was overpriced. And after one or two price drops it could well be ripe for a cheeky offer.

So which one are you and how can you best play this market? Winter brings out the wet trackers in horse racing – the show ponies have a spell, and the old reliables you have seen for many years becomes a lot more visible. So it is in real estate. You will see a number of auctioneers take extended breaks, returning on the occasional weekend when a group of auction homes have been bunched together. In the meantime the quality sales agent are playing a far greater role within the company.

But it’s also worth realising that while a few auctions are still around, over the next few months more homes will be sold over the phone or in a coffee shop than on the pavement. When you’re buying via private sale, expression of interest or off market, that requires different skills. It’s not just about turning up at an auction, watching to see what others do and then putting your hand up. For all the issues connected with auctions, they are still far more transparent than the most common types of deals you will see (or rather, won’t see) between now and the footy finals.

So this winter, like any market, has opportunities for the buyer. Especially for the measured and opportune buyer. Maybe not so much for the wow buyer. And there are some traps for the inexperienced or desperate buyer – but nothing a cool head can’t avoid.

Mal James is principal of james.net.au, which advocates on behalf of buyers of property over $1 million. Mal writes weekly auction reports, advice and in-depth market analysis on James' website.

Mal James

Mal James

Mal James is principal of James Buyer Advocates, which advocates on behalf of buyers of property over $1 million.

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