Activity in the Welsh housing market continues to weaken, with higher interest rates and a difficult macroeconomic outlook both taking their toll on buyer sentiment, according to the November 2022 RICS UK Residential Market Survey.
For the seventh month in a row, buyer demand in Wales continued to fall, with the net balance coming in at -34%. Whilst this is less negative than the -65% reported in the previous month, the market remains in a firmly downward trend with indications that this will continue in the near term. For agreed sales, a net balance of -48% was reported over this survey period indicating a continued decline in sales activity.
Regarding house prices, a net balance of -28% of survey participants in Wales witnessed a fall
over the month. And Welsh respondents on balance expect prices to decline further. The net balance for three-month expectations is -61% of respondents and a net balance of -50% of respondents was recorded regarding the 12-month outlook.
Anthony Filice FRICS of Kelvin Francis Ltd Cardiff said: “As well as the seasonal slowdown, economic factors are affecting demand. Serious vendors are still listing, and buyers buying. The numbers are less but they are still taking place. Vendors are coming to terms with lower offers. Buyers are viewing more properties before deciding, indicating a more normal market.”
Simon Rubinsohn, Chief Economist, commented:
“The overall tone of the latest RICS Residential Survey is understandably more downbeat than previously, reflecting the uncertain macro environment and the higher cost of mortgage finance. However, anecdotal comments from respondents capture the very real significant divergences in market behaviour at a more localised level.
“Although the headline price balance recorded two consecutive modest monthly falls in prices, and the forward-looking series indicate that this trend will extend through the coming months, the likely ‘job-rich' recession suggests the downturn in the housing market this time could be shallower compared with past experiences. Meanwhile, the imbalance in the rental market remains significant as landlord instructions continue to fall and is consistent with further increases in rents, even if the momentum does appear to be slowing just a little.”