The housing market in Wales continues to be challenging but the prolonged downturn in house sales could be bottoming out, property professionals have said.
The newly agreed sales indicator has been in negative territory for 17 consecutive months, but now professionals are predicting that sales will rise on a three-month outlook for the first time since April 2022.
The optimistic outlook was recorded in the latest residential market survey by the Royal Institution of Chartered Surveyors (RICS).
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It found that those surveyed were also slightly less pessimistic about house prices in the next three months, reporting a net balance of -16% for price expectations last month compared to -58% in April and -31% in March.
This may be linked to a recent uptick in supply levels. A net balance of 10% of property professionals said that instructions to sell rose last month - the fifth consecutive survey to report an increase.
However, new buyer enquiries continued to fall with a net balance of -31% of survey respondents reporting a decline in demand.
Despite this, Welsh surveyors were more optimistic about the outlook of the housing market when compared to UK counterparts, with prices expected to fall over the next quarter.
Melfyn Williams, MRICS of Williams and Goodwin in Llangefni, said: “The property market continues to tick over as we move into the summer period. Auctions remain popular with good success rates and prices achieved in excess of guides. The right property, in the right location, at the right price, is selling well.”
Anthony Filice, FRICS of Kelvin Francis Ltd in Cardiff said: “Increasing numbers of properties are coming onto the market. Vendors who accept advice on values are selling, but with the market now in favour of buyers, there is more choice and some are taking longer to offer as a result.
RICS senior economist Tarrant Parsons, said: "The latest RICS UK Residential Survey feedback indicates a modest recovery in the sales market activity during May, with generally less negativity compared to the end of 2022.
“However, it seems storm clouds are gathered, with the UK's stubbornly high inflation likely undermining the recent improvement in activity by prompting the Bank of England to take further action through interest rate rises, leading to higher mortgage rates and ultimately reducing affordability and buyer demand. The banking sector appears to expect this with many banks and building societies already introducing products with higher interest rates.
“Interest rate rises are also impacting the rental sector and combined with looming reforms proposed in the government’s Renters (Reform) Bill, landlords are increasingly deciding to leave the sector and sell up property, causing further constraints to lettings supply.”
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