The Welsh housing market continued to weaken towards the end of 2022 as sales continued to decline, according to surveyors. Buyer demand in Wales continued to fall for the ninth consecutive month, with the net balance of -54% of professionals reporting a fall in new buyer enquiries through December, according to the latest survey from the Royal Institution of Chartered Surveyors (RICS).
This was down from -34% the previous month, with buyer demand expected to decline further throughout 2023. The number of fresh property listings coming onto the sales market also fell to -16% - indicating there may be a fall in stock levels. This was down from 11% in November 2022.
Limited supply and limited demand may be impacting sales in Wales, with a net balance of -59% of respondents reporting a fall in sales through December. These factors may also be weighing on the outlook of surveyors, with -23% expecting sales to fall further over the next three months.
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Regarding house prices, a net balance of -6% of professionals in Wales witnessed a fall through the final quarter of 2022. On balance surveyors expect prices to continue to decline further, with a net balance of -62% of survey respondents expecting prices to fall at the beginning of 2023.
This figure is in line with the UK average where -66% of respondents expect prices to fall. The balance of respondents in Wales also expects prices to be lower in a year’s time (a net balance of -34%).
The December survey also asked if property professionals are seeing more interest from buyers in homes that are more energy efficient. Around 40% of those surveyed answered yes, but this was outweighed by 60% who did not see this trend, RICS said.
However, 61% of survey contributors stated that highly energy efficient homes were holding their value. While, 41% noted that sellers were attempting to attach a price premium on homes with a high energy efficiency rating.
Anthony Filice FRICS from Kelvin Francis in Cardiff said: “There has been a slowing down of activity, but part of this is seasonal. Many Vendors and Buyers are looking forward to the new year, when activity should increase. Mortgage interest rates have increased overall but here are still good deals and the overall confidence in property values continues.”
Melfyn Williams MRICS of Williams & Goodwin The Property People in Anglesey said: “Property market returned to normal with typical seasonal lull. Enquires already picking up in January with positive sentiment for the year ahead, despite financial woes.”
Simon Rubinsohn, RICS chief economist said: “The latest RICS Residential Survey highlights the emerging challenges in the housing market as new buyers grapple with more costly finance terms and uncertainty over the outlook for the economy.
“This is reflected in forward looking RICS indicators around both prices and activity. However, some signs of an easing in inflation pressures more generally could provide a chink of light particularly for those looking to take their first step on the property ladder.
Meanwhile feedback around the lettings market once again demonstrates the need for some concerted thinking about how to create a thriving sector that caters for both the private and ‘affordable’ renter”.
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