Thought I’d write a quite blog on my thoughts on what the market is going to do in the short and medium term.
In Bournemouth every agent I speak with is complaining of a lack of instructions. Not enough people wishing to move. This is keeping property prices strong as there are still buyers in the market place. Not loads of buyers, but too many for the number of houses coming on for sale.
So in the very short term, it’s an idyllic market to sell. Little competition with strong prices being achieved (but not crazy prices). Combine this with low interest rates and things are looking positive as far as sellers are concerned. I’d say as of today, it’s a 60/40 market in favour of sellers.
I see the next six months as being much of the same really. The only thing I can see making a real difference is if interest rates rise, therefore making home ownership more expensive, which will have buyers less enthusiastic as rates are higher, and likely more sellers as down-sizing becomes far more appealing. If this happens, we’ll see a very real drop in house prices. Not a huge drop, but a real one.
Looking longer than that, we’re starting to look at how the government decide to play things out. Inflation is said to have increased to 2.9% in June, but is that really realistic? Article here on the BBC website. If we put inflation at nearer 6% (My personal view), then property prices in the majority of the country are being eroded by that, not by physical sold prices.
I do believe good times are ahead of us again, and the reason being that building supplies are going up between 10% and 15% a year, inflation is eroding house prices by say 5% a year, so within 6-10 years, we’re looking at it being cheaper to buy a ready made property than it will be to build one. We’ll be at the point where we’ve an expanding population and houses can’t be built for the price they’re to be sold at. Supply and demand leads to one thing, real-life price rises again but it’s going to take time to get there.
Saying all this, it’s very much swings and roundabouts if you’re buying another property when you sell. If it’s good to sell, it’s harder to buy and vice versa.
Would love your feedback and thoughts on the blog and if you have any questions, please do ask.
Mr Green Estate Agents