Making the decision to purchase a new home is an exciting time but knowing when to take the big leap is a contemplation shared by many purchasers.
There are certain influences that affect the property market throughout the year, and some figures to be mindful of which will assist with making the most informed decision about the timing.
Keeping abreast of metrics
Before making, arguably, the biggest purchase decision of your life, study the property market and familiarise yourself with the metrics. If you’re looking at a particular area, understanding the key metrics can help you gain a better understanding of the current market. Things to take note of include:
Reviewing average discounts when you’re on the hunt for a property will give you a clearer idea of the current demand in the market. When demand is low, you may notice that properties are sold for less than what they’re advertised for. This can indicate a lack of buying competition and consequently, sellers may be prepared to take a little less for their property.
Auction clearance rates
In areas where properties tend to go to auction, keeping an eye on the clearance rates can be a great way to assess the likelihood of a discount. When the auction clearance rates decrease, the gap between what buyers are willing to pay and what sellers expect to take widens which can give buyers a little more bargaining power.
Time on the market
Where private treaty sales are more common, pay close attention to ‘time on the market’ as the number of days a property is up for sale will indicate the current market activity. In a heated market, a property will be snapped up quicker, and that means more competition and consequently, substantial discounts may be unlikely.
Time of year and seasons
Once the decision is made, it’s understandable to want to buy property as soon as you can, after all it’s an incredibly exciting time. If there are no pressing reasons to move immediately and you can sit tight though, sometimes holding off until a better time of year can be a savvier approach.
Although the options available on the market can be significantly lower in the new year, grabbing an amazing deal is more likely, with people more inclined to consider offers previously dismissed due to eagerness to sell and the desire to start fresh somewhere else in the new year.
Other times of the year that are considered a great time to buy is immediately after Easter and intensifying towards to end of the financial year, as well as when the weather starts to warm up in spring through to December when individuals are more likely to spend so that they can move over the summer holidays.
It’s not just the actual purchase of a property that needs significant consideration either. Applying for a home loan is just as important as the final transaction itself. Did you know that lenders tend to gather applicants and process applications at the start of the month, giving you increased attention to your needs, rather than at the end?
Summer is also when the highest rate of mortgage deals are sealed, whilst winter is a prime time to purchase due to lack of competition across the market. When you have a large enough deposit, understanding your borrowing power can also ensure you’re getting enough bang for your buck.
Whilst everything we’ve covered are worthwhile considerations, ultimately the right time really does come down to your individual circumstances – the timing has to be right for you as well!