The latest research by the Royal Institute of Chartered Surveys (RICS) has revealed that the downward trend of buyer demand within the Welsh property market is continuing.
The RICS Residential Market Survey is a monthly analysis of the UK residential sales and lettings sector, compiled from research by contributing RIC members who are real estate industry experts. The results are used by the government, the Bank of England and other key institutions including the IMF, as an indicator of current and future conditions in the housing market.
The survey for November 2022 states that 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.
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This statement is supported by the Halifax Bank's latest house price data that covers growth, decline and average house prices, which has also reported another month of slowdown across the UK, with Wales one of the top regions to see the biggest dip. Find out more about the Halifax Bank report here.
The RICS survey can drill down somewhat further into Wales' property market activity and the November release states that for the seventh month in a row buyer demand in the nation has fallen, with the survey revealing a net balance across the sector, which implies a continuing decrease is on the horizon.
Buyer demand is suggested to have a net balance of a -34% drop. Whilst this is less negative than the -65% reported in October, 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 of November.
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, RIC's chief economist, says: "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.â Find out more about the new rental laws in Wales here.
Iain McKenzie, CEO of The Guild of Property Professionals also comments on the current property market situation, saying: "It's important to keep a sense of perspective and remember that property prices soared massively during the pandemic, meaning that these decreases are minor in comparison.
"With nearly one in three property purchases âneeds-basedâ due to changing personal circumstances, the market will not grind to a halt, but pricing will be paramount to achieve a sale as the market swings back in the favour of buyers."
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