Zoopla’s property announcement last week was welcome reading for many of us feeling a bit beleaguered by seller over-expectation, buyer lethargy and the gloom and doom of an English Spring.
According to that Zoopla forecast there are unlikely to be any more price drops in 2024 and sales in some areas are actually increasing, although that is from a pretty low level a year ago.
There are glimmers of hope for us. The weather will surely improve soon and long evenings will entice buyers back out again. Agent friends of mine report activity from developers in the last month which has been lacking for well over a year now. That is often the first sign of a recovering market.
At the end of 2023, half the number of homes sold had a discount of 5% or more. Today, that figure has shrunk to two-fifths but this could be for two reasons – the market improving a little and sellers being more realistic with their asking prices. This is even mite likely given that a lot of the overpriced stock of 2021/22 has been thinned out.
There is extreme optimism in some markets, but sadly this has not yet spread into property.
In the past six months, gold is up 20%, Silver is up 24%, Bitcoin is up 130% and the FTSE 7% (with 4% of that growth in the last month alone). Is it simply a bubble fuelled by speculators?
Or is it a more worrying sign for those of us in the sector? The growth elsewhere and inflation of 5% in the goods and services we buy is eroding the value of property at a faster rate than many would think. A flat lining property market is in effect losing perhaps 1% a monh comparably.
So, am I worried? Not yet but I want to see the trend change soon. Although this ‘comparable’ deflation will make homes more affordable for hard-pressed first time buyers, it is, as we have seen in the past, a slippery slope. A housing market doom loop you could say .
We don’t need rising prices but we do need stability. I hope we do not have to wait too long before The BofE begin to reduce interest rates to once again make property the attractive prospect it has always been.
