The number of new homes coming onto the housing market in Wales rose again during March, according to the latest Royal Institution of Chartered Surveyors (RICS) Residential Market Survey, but buyers remain cautious amid rising borrowing costs and wider geopolitical uncertainty.
A net balance of 13% of Welsh respondents to the survey reported that new instructions to sell were up in March, indicating that more sellers were putting their houses on the market.
However, whilst supply is stronger, demand is lower for the second consecutive month, albeit much less negative than other parts of the UK. A net balance of -7% of Welsh surveyors reported that new buyer enquiries fell through March. And a net balance of -5% of respondents in Wales reported that sales declined in the most recent survey for the second consecutive month.
Despite lower demand, the trajectory of prices continued to be modestly upwards in the first quarter of the year, with a net balance of 12% of Welsh respondents reporting an increase.
But respondents in Wales remain cautious about the outlook for the next three months, with a net balance of -7% of respondents in Wales anticipating that prices will fall, and surveyor expectations for sales in the three months ahead broadly flat.
Commenting on the sales market, Anthony Filice of Kelvin Francis in Cardiff said: “Concerns for first-time buyers over increasing interest rates have not yet really materialised and the market is still active with a good number of properties becoming available and sales being agreed at full figures.”
Commenting on the UK picture, RICS Head of Market Research & Analysis, Tarrant Parsons, said: “The mood across the UK housing market has shifted markedly over the past couple of months. What had been a cautiously improving picture for activity has been knocked off course by the wider macro fallout from the Middle East conflict, as the renewed deterioration in the mortgage rate outlook has proved particularly challenging. Indeed, with average fixed rates climbing back above 5% according to some sources, it is unsurprising that buyer demand has softened. The path ahead hinges on whether or not recent surges in oil and energy costs begin to reverse in what remains a highly uncertain geopolitical environment.“
