The festive season kicks off in less than a month – and we all know what that means for our bank accounts. Most people loosen their purse strings in the weeks leading up to Christmas because of the irresistible offers and discounts – and the real estate industry is no exception to that. Customers are bombarded with ‘unbelievable’ prices on property listings during this period to boost buying activity.

Rahul Agarwal, the director of Wealth Discovery says that most investment advisors think that people who buy real estate with a pure investment intention shouldn’t look for properties during the festive season

Real Estate as Investment Asset

Around this period, real estate industry is under immense pressure to offload some of the inventory and builders are happy to offer discounts on some of their stock. But does that mean that buying property during the festive season a smart idea?

Most investment advisors think that people who buy real estate with a pure investment intention shouldn’t look for properties during the festive season. Rahul Agarwal, the director of Wealth Discovery says that investing in real estate is a risky business. It takes a lot of time and money before property prices climb up up to a profitable level. But if someone is buying their first home with the intention of keeping it for a good few years, this might be the right time to make the big purchase.

Potential homeowners should give higher preference to ready-to-move-in units over ongoing development projects which can often take months to complete, Agarwal advises. He adds that under the current market conditions, it simply doesn’t make sense to look at real estate as a profitable investment asset. The prices in the sector have seen a positive change in 2018, but that is still not enough for investors to make a profit.

More Discounts During the Holidays

Some real estate markets have seen significant price increase over the past year. However, the metropolitan cities, which are considered a benchmark for overall health of the sector, are still lagging behind in prices. In some markets, the prices have actually declined in the negative territory.

Nevertheless, most people put their house-shopping plans on hold until the pre-Christmas season, since it can save them thousands of dollars. At the Australian real estate agency, Cohen Handler, December is often the busiest month for buying property, because while most people are busing shopping at Christmas sales, some savvy clients take advantage of the opportunity to buy their dream home for a bargain.

Most vendors slash prices on their properties before the holiday season because they’re keen to make the sale before Christmas time, for their own peace of mind. This is often the time when buyers can negotiate prices and get a discount of up to $30,000 if the seller is looking to make a quick sale.

Most vendors and real estate agents are flexible in property prices around Christmas time when there is a dearth of buyers in the market

Reduction in Buyer Concentration

The housing market is also less crowded during this time of the year as most of the people put off plans to buy property until after the New Year. Since everyone else is taking a break from house-hunting, the reduction in buyer concentration can give you more leverage to negotiate prices with the seller because you know that they don’t have many buyers lining up at their door.

The festive season is a race for businesses to clear out inventory and wrap up sales before the end of the year. Real estate agents are part of this race too. Closing property deals before Christmas means that real estate agents can end the year with a higher commission.

This motivation frees up more room for bargaining where buyers can get thousands of dollars in discount on ‘must sell’ properties and the agent gets a large commission just in time for Christmas. It’s a win-win for everybody.

One of the biggest reasons why real estate agents and vendors are in a rush to close deals during this time is to avoid to an influx of listing, come January. Historic data shows that buyers and sellers start flooding the market once the holidays are over, and soon there is an influx of new properties that can create more competition among buyers and raise home prices.

Do you think it’s wise to invest I real estate during the festive season?






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