Property Investment
4 min read
The countdown to Christmas is on.
Most people are busy buying gifts, setting holiday plans, or planning festive meals ... but what about investors eyeing up property deals?
The holiday season might seem like a strange time to buy an investment property. But it does come with its opportunities. That’s if you can navigate the challenges.
In this article, you’ll learn what to expect if you buy a property around Christmas.
This is specifically if you are buying a New Build property off-the-plans.
Key points:
The holiday period can slow down your property purchase.
When you sign a contract for an off-the-plan property, you’ll usually have 10 days due diligence.
That means that after you sign the contract, you can cancel it within 10 days … no questions asked.
That means you’ve got time to do all your checks.
But, the Christmas period can slow down that due diligence. That’s because:
For instance, let’s say you sign a contract in the middle of the year.
You sign on June 10th. So, you have until June 24th to complete your checks. Simple.
But around Christmas, the days between December 24th and January 6th aren’t classified as working days.
So you might sign a contract on Friday, December 13th 2024. And you might not be due to go unconditional until Friday, January 10th 2025.
So, if you’re signing a contract before Christmas, be prepared that you might not go unconditional until the new year.
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Almost all law firms close from December 23rd to January 6th. Only a few will offer a skeleton staff during non-stat days.
Let’s say you sign it on December 16th. 10 working days would usually be December 30th.
But, at this time of year, you’ve got public holidays, as well as the shutdown period between Christmas Eve and January 6th.
You also need to think about the banks.
When you sign an off-the-plans contract, you’ll want to make sure you can get the money from the bank before you go unconditional.
But most banks, like lawyers, shut down for Christmas.
While the banks don’t stop accepting applications … they can’t promise it will be done in time for Christmas.
This is another reason that if you sign a contract before the holidays, you might not go unconditional until mid-January.
Because of all this, you might think, “What’s the point? Why don’t I just wait until January?”
If it’s all going to be pushed into January 2025 … why not just wait till then and enjoy my holiday?
There are 2 reasons why buying before Christmas can still make sense:
Property prices are more likely to fall in December and January. That’s compared to most of the rest of the year.
That’s because fewer people buy during the break.
Everyone is at the beach or broke at home eating Christmas ham leftovers. You are one of the few out there thinking about buying at this time of year.
That’s why it’s a quiet time, and sellers are more motivated.
This means you’re more likely to get a good deal.
When you sign a conditional contract, you put yourself in the “Property Power Position”.
You are the only person who can buy that property. The developer can’t sell it to anyone else.
And as long as you have the right clauses, you can cancel at any time. No questions asked.
This means no one else can swoop in and pip you at the post, and you’ve already agreed on a price. You’ve got the power.
Some people will think, “If I sign a contract to buy a property … I’m going to be thinking about it all Christmas. I don’t want that stress.”
That makes sense. But some people think the opposite way.
They think: “Great, I can sign a contract, knowing I’ve got the property locked in. The developer can’t sell it to anyone else. Now I can relax over my holiday and deal with it when I’m back.”
Now, some people will say: “Great! I can get that property under contract and forget about it over Christmas. I'll come back in January and do what I need to do”.
Other people will say: “Hell no, I’m not doing that! It's not going to be the thought of Santa sliding down my chimney that’s keeping me up on Christmas Eve … it's the thought of this property!”
So whether you should buy around Christmas (or not) does come down to how you think about it.
Just remember, if you get into January and need more time. You can always get your lawyer to ask for an extension to the contract. These public holidays should take off the pressure rather than heap more on.
But, ultimately, the right decision depends on you. How much are you willing to balance opportunity with a bit of festive-season patience?
Financial Adviser and Property Investor in Auckland
Nefe Teare is a Financial Adviser and Property Investor, with previous roles including Loan Writer and Senior Investment Adviser in KiwiSaver, Managed Funds. Nefe has helped hundreds of Kiwis plan for retirement and successfully guiding them towards achieving their financial goals.
