The number of new homes coming onto the housing market in Wales rose through May according to the latest Royal Institution of Chartered Surveyors (RICS) Residential Market Survey, but surveyors report that buyers remain cautious as prices continue to adjust.
A net balance of 31% of respondents in Wales reported that new instructions to sell had increased in the most recent survey. This is the highest balance seen across all UK regions.
Whilst supply was on the rise, demand was subdued. A net balance of -8% of Welsh surveyors reported that new buyer enquiries fell through May, falling from the 10% that was seen in the April survey.
On the sales front, a net balance of -22% of surveyors reported that newly agreed sales fell through May, which is down from the 34% that was seen in the survey previous.
And looking ahead, a net balance of -29% of surveyors expect sales to decline over the next three months. This is down from the net balance of 6% that was seen in the April survey.
Looking at pricing, a net balance of -23% of Welsh respondents report a fall in house prices over the past three months, down from the -8% that was seen in the survey previous. In saying this, this balance is still above the UK average which sits at -35%.
And looking ahead respondents in Wales are hesitant but the outlook for prices too. A net balance of -24% of surveyors in Wales anticipate that prices will fall over the next three months, which is down from the 9% that was seen in the April report.
Commenting on the sales market, Anthony Filice FRICS of Kelvin Francis Ltd in Cardiff, did say though that there are signs of confidence in the market, for instance the rising number of instructions, despite uncertainty in the economy. He added:
“Vendors are negotiating more flexibly, particularly where buyers are in a position to proceed.”
David James FRICS of James Dean in Brecon said:
“The best properties are selling, the rest take some time to sell.”
Commenting on the UK picture, Tarrant Parsons, RICS Head of Market Research and Analysis, said:
“The latest survey data suggest the recent downturn in activity may be beginning to stabilise, with several key indicators broadly holding steady. However, as they remain in negative territory, it would be premature to interpret this as the start of a recovery.
“The decline in CPI inflation to 2.8% in April provided some temporary relief, but the Bank of England has signalled that further inflationary pressures are likely as higher energy costs continue to pass through. Against this backdrop, the prospect of further rate rises cannot be dismissed, and until there is greater clarity, market sentiment is likely to remain fragile.”
