ALERT: Estate agents expecting house prices and transaction levels to rise in 2017
By Alex at Aboda, Feb 24 2017 10:27PM
Agents begin 2017 feeling a little more positive than at the end of 2016. There are slightly more agents expecting prices and transactions to rise over the next few months, than fall. The scale is low, however, suggesting quite a disparity of opinion. The evidence suggests that market reality tends to be less dramatic than agents might expect. Hard data will be very important in coming months to judge the market correctly and make robust decisions.
The Royal Institute of Chartered Surveyors monthly residential market survey is gauge of sentiment in the market. It is extensively quoted and widely regarded as a lead indicator of short term trends in the market. We compared some of the dramatic swings in sentiment over the past year, with the actual changes that followed in prices and volumes.
It is unsurprising that the mood amongst agents reacted strongly to sensational political events in 2016 and that led to significant short term fluctuations in confidence. The survey is a reliable indicator of trends in the market, but less good on the scale of change.
In June 2016, the month of the Brexit vote, there was a rapid decline in sentiment. A net balance of 26% of agents anticipated transactions falling in the following three months. As it turned out, the average number of transactions between July and September were on a par with June levels – there was no fall. A similar proportion expected prices to fall in the three months following the Brexit vote. Three months later the annual rate of growth had slowed from 9.3% to 6.6% – but no significant fall.
So, as ever, it's as clear a mustard!
What are your thoughts on the market for 2017?