There were fewer homebuyers active in the housing market in Wales last month, but limited available stock is continuing to drive prices up, according to the latest Royal Institution of Chartered Surveyors (RICS) Residential Market Survey.
For the fourth consecutive month, new buyer enquiries were reported to have reduced in number, with a net balance of -47% of respondents recorded. This is the lowest that this figure has been since May 2020.
Newly agreed sales were also reported to have reduced, with a net balance of -11% of respondents recorded for this indicator. This is the fifth successive month that the balance of respondents in Wales has pointed to lower levels of newly agreed sales.
Although a net balance of +13% of respondents reported an increase in new instructions to sell, this comes after a long period of supply coming onto the market reducing. And indeed, the survey suggests that stocks on agents’ books are still low in Wales by historic standards.
Looking at pricing, a net balance of 54% of respondents in Wales said there was an increase in prices over the past three months, down from 64% the month previous. Looking forward, a net balance of 9% of respondents expects prices to rise over the next quarter.
Higher interest rates and the cost of living crisis are cited by contributors to be causing the drop in market activity. And looking ahead, respondents in Wales, on balance, expect sales activity to reduce in the next three months as well. Indeed, in the latest survey, the balance regarding three-month sales expectations is at its lowest since April 2020.
Anthony Filice FRICS from Kelvin Francis Ltd said: “There are more properties being listed, but they are taking longer to sell. Buyers are taking more time, and some are making offers on more than one property, before making a final decision. The situation coincides with the onset of the summer holidays.“
Tarrant Parsons, Senior Economist for RICS, concluded: “Amid a backdrop of sharply rising living costs, slowing economic growth and higher interest rates, it is little surprise that housing market activity is now losing some momentum. With monetary policy set to be tightened further over the coming months, sales expectations point to a further softening in transaction volumes going forward. Nevertheless, with respect to house prices, limited supply available is still seen as a crucial factor underpinning the market. Although house price growth is likely to continue to ease, respondents still anticipate prices will be modestly higher than current levels in a year’s time.”