Property slump is getting less bad says new RICS report
Summary
With buyer enquiries, agreed sales, new listings and house prices still cemented in negative territory, estate agents across Gloucestershire continued to feel their own professional heat in June – but there are small signs that the downturn may finally – just about – be easing.
Details
The latest Royal Institute of Chartered Surveyors (RICS) report highlights how buyer enquiries rose from -34% to -29%, while agreed sales improved from -35% to -32%. They’re hardly figures to merit dusting off the bunting, but could the graphs finally be easing in readiness for a kinder sales climate?
Tarrant Parsons, RICS Head of Market Research and Analysis , said there were indeed reasons to be cautiously cheerful: “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.” He added: “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.
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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.” While measures of buyer demand and newly agreed sales persist as negative, the RICS found that headline house price indications have been largely stable in recent months, “although this remains consistent with a modest degree of downward pressure”, the report said Near-term sales expectations have become a touch less negative, the report added, but “are yet to signal a genuine turnaround”, despite the recent easing in global geopolitical tensions and the associated unwinding in oil prices (all of which, of course, may be about to be reversed by new exchanges of fire).
In fact, if overseas tormoil shows solid signs for easing, the report points to a new headwind threat in the shape of domestic political uncertainty, primarily given the questions that hang over any core policy changes on housing and the broader economy with the arrival of Andy Burnham in No.10, along with whoever he is likely to appoint as a replacement to Chancellor Rachel Reeves.
Westminster expectations err on the side of continuity over the Labour administration’s fiscal policies, but today’s report notes, that concerns over potential wealth levies and regulatory changes are causing a “wait-and-see” approach among buyers – and impacting market sentiment.
Sentiment, is, of course, valid: the business of bricks and mortar being, after all, significantly emotional and not merely one of raw economics. That said, the report picks up on a key specific for the rate of property coming onto the market for the first time in its regional research for the South West.
Report source: Punchline Gloucester