Want to Invest in Property?

Let us help you make the right decisions for the best results.

The 5 buyer mistakes to avoid during Melbourne’s winter property market

As winter approaches, the property market tends to slow down. 

But that doesn’t mean you should, if you’re looking to buy.

Let’s look at the key mistakes to avoid this winter.


1. Don’t change goals or objectives

Just because supply levels change, doesn’t mean your goals have to.

When supply drops, people often think they won’t be able to find what they’re after. This leads them to make compromises that they wouldn’t consider in a normal or fully supplied market. 

For example, they might start to look at a wider range of locations, possibly expanding their search further out to see what’s available, or consider smaller land parcels.

You may have initially been looking for a property around five to six hundred square meters, but start considering two to three hundred square meters to broaden your options and potentially enter the market sooner. Alternatively, it might concern the accommodation; perhaps settling for three bedrooms instead of four, which deviates from your long-term planning objective and could necessitate a future upgrade.

Another compromise might involve considering properties in lesser condition that you could renovate down the line. That’s not a smart move if the plan was to find a move-in ready home where you could live comfortably for five to ten years. 

You shouldn’t let a market with limited stock spook you, forcing you into making hasty decisions. This issue typically arises when the market is strong, and values begin to climb. We saw this during the COVID-19 property boom of 2020 and 2021. Significant FOMO took hold, resulting in frenzied activity, with many paying premiums.

From an investor perspective; where acquiring a growth asset is paramount, they might lean towards a rental return-focused asset, if the market isn’t offering a lot of capital growth potential. This may be good for shorter term rental income, but is likely to hurt capital gains in the long term.


2. Don’t rush in

This is a common issue in a market with limited supply. People often feel that if they don’t buy immediately, they’ll miss out.

This urgency can lead to changes in their purchasing habits, such as rushing decisions. One of the first compromises might be skimping on the level of due diligence you had initially planned contracts not being reviewed or deciding to skip the building inspection, because the property appears to be well-renovated. Or perhaps you forgo value assessments. These oversights can land buyers in a lot of hot water down the track.


3. Don’t jump to conclusions on market shifts

A lack of supply can potentially give a false indication of the actual market conditions. 

A limited supply often leads to increased competition for the few available properties. This might make it appear as if property values are increasing or as if there is heightened competition for specific properties. 

Consequently, people can get caught up in paying higher prices that may not necessarily be justified.

It’s important to understand the market dynamics and not jump to conclusions based on one or two transactions. You need to be sure that a real trend is developing, rather than making assumptions based on a specific period of limited activity.

Patience can be a really big factor when it comes to buying through the winter markets.


4. Don’t go into full hibernation, the market doesn’t 

It may seem somewhat contradictory given the previous points, but you shouldn’t expect competition to drop off over winter. It’s a common misconception that the market goes into full hibernation over the winter. 

While it’s true that buyer and vendor activity typically slows down during the winter months, this isn’t always guaranteed. Some buyers decide to put their search on hold. However, the savvier buyers continue their search, aware that the market does not necessarily pause. 

Some might think they can lower their price expectations and still pick up a bargain because of reduced competition. This mindset can result in missing out on excellent properties and losing opportunities to acquire high-quality stock. While it’s tempting to expect bargains, it’s crucial to maintain a realistic view of where value lies. You shouldn’t adjust your expectations excessively, simply because circumstances have changed.


5. Don’t place all your bets on Spring

Some buyers decide to completely wait until the Spring market, anticipating a better selection due to higher supply. 

Consequently, they might choose not to renew their financing. The right property could easily appear during the winter months. If you’re not prepared, you might miss out on that opportunity. Additionally, from the perspective of renewing finance and staying nimble, it’s important to remember that financial conditions and lending criteria can change over winter. 

Already, we’ve seen significant changes in the past 12 to 18 months where loans that were once within reach for many, have become unattainable. It’s crucial to stay active in Winter, not only to keep your finger on the pulse but also to avoid missing out on potential opportunities.


Take home message

Whether in the slower winter months or the busy Spring selling period, the best opportunities aren’t tied to the season, but to your readiness to act. 

Stay informed, remain flexible, and active over the winter months. If nothing comes up that’s fine, you’re well placed to launch into Spring.

Striking the right balance between patience and preparedness is critical, and one that will pay off in the long run.

Copy link