With seven auction weekends left before Christmas, buyers are beginning to feel the pressure with many willing to pay substantially over the reserve in the rush to be in before Christmas, according to the Real Estate Buyers Agents Association (REBAA).
REBAA president Cate Bakos said increased sentiment, three consecutive interest rate cuts, softening lending conditions combined with the lead-up to Christmas had stimulated the market with auction clearance rates high in many areas around Australia.
“There is no doubt Christmas is having an effect on buyers who love the idea of moving in to their new house by the festive season or who may also have children starting a new school in late January and they want to have settled in to the area,” she said.
“Many properties, particularly in Sydney and Melbourne, are selling above expectations, above recent past comparable sales, and above many buyer’s already-stretched budgets.
“To increase their chances of success, buyers now realise that they need to apply a stronger budget than the appraised value of the property based on recent comparable sales analysis.”
Ms Bakos said buying in December could still have its advantages as seller numbers heighten and buyers start to drop off as Christmas approaches.
“Buyers often underestimate the benefit of being purchase-ready for this exciting period,” she said.
“Having finance pre-approval sorted out, being prepped with a firm and feasible strategy, and with less competition in the marketplace can reward those who are ready to pounce.”
Ms Bakos said in a moving market buyers should not rely on comparable sales data which can be up to three months old.
“In an aggressively moving market prices can go up substantially in a matter of weeks,” she said.
“Relying on comparable sales data may not be the best strategy if you want to understand market value.
“Buyers need to carefully weigh up the market conditions, timing, competition and their own personal risk as they navigate this aggressive market.
“Having a professional buyer’s agent on side can help mitigate the risk of underbidding or overpaying.
“Waiting it out for cooling market conditions is potentially an even larger risk if the buyer finds that the market then outpaces them and restricts their ability to buy into their chosen suburbs.”