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13 July 2023

Expectations for Housing Market in Wales Deteriorate


More homes came onto the market in Wales through June, but there are fewer buyers actively looking to purchase, according to the latest Royal Institution of Chartered Surveyors (RICS) Residential Market Survey.

A net balance of +16% of Welsh respondents said that instructions to sell rose in the month, up from +9% in May; the sixth consecutive survey where this figure has been in positive territory.

Looking at sales though, a net balance of -32% of respondents reported a fall through June, and respondents are not optimistic about the three-month outlook. A net balance of -6% of respondents anticipates a fall in sales over the next three months, down from +21% the month previous.

There was also a fall in new buyer enquiries with a net balance of -30% of respondents reporting a fall.

Regarding prices, a net balance of -40% of respondents reported for prices in the June survey which is similar to the UK figure of -46%. However, respondents’ expectations are for prices to reduce further over the next three months, with a net balance of -54% of surveyors in Wales anticipating a fall between July and September.

Paul Lucas FRICS of R.K.Lucas & Son in Haverfordwest pointed out that:

“sales instructions are increasing whilst actual sales are slow.”

John Caines FRICS of Payton Jewell & Caines Ltd in Bridgend added:

“The market is now more price conscious than previous years, with the impact of higher mortgage rates reflected in achieved selling figures.”

Melfyn Williams MRICS of Williams & Goodwin Tpp Ltd in Anglesey & Gwynedd said:

“The property Market continues to be active with property in the right location at the right price selling well. Houses initially priced too high could now result in them selling for less in the long run. It’s important now to price right and choose the best method of sale to suit circumstances.”

Simon Rubinsohn, RICS Chief Economist, commented on the UK picture:

“The latest increase in interest rates and the impact this has already had on mortgage rates is clearly visible in the key RICS metrics regarding buyer enquiries, sales and prices which have all retreated over the past month.

“Inevitably in this environment, activity levels are likely to remain relatively subdued. However, an important message coming back from RICS agents is around ensuring prices are set with an eye on the market conditions of today, rather than the recent past; when this is done, sales are taking place.

“It is also worth bearing in mind that house prices are only very modestly down on their recent highs and well above where they stood prior to the onset of the pandemic.

“Further declines are possible but need to be seen in the context of the previous strength in the market.  Additional questions included in the latest survey also provide some support for the notion that, on balance, properties with better energy efficiency credentials are holding their value better than some others”.

 



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