Signs of recovery in Rightmove August report but wishful thinking? |
|
|
Published
:
Mon, 19 Sep 2005 11:05
|
LONDON: Further proof was provided that the property market had reached its trough and would recede no further. Data from a survey by property website Rightmove said the average asking price of a home in the UK had fallen from £196,282 to £195,407.
The survey covering the period from Aug 7 to Sept 10 found house prices sliding 0.4 percent tugging annual rate of inflation down from previous 2.1 percent to 1.6 percent.
September is the third consecutive month when prices continued their downward trend attracting more buyers back into the market.
The interest rate cut announced last month may have stirred the market back into action otherwise August is traditionally a slow month for the property business compared to June and July. Some areas had even seen a 10 percent rise in sales, outstripping sales during each of the two previous months.
Another minor surprise was that the average number of properties on estate agents’ books had remained almost unchanged; there are normally fewer sales during August causing stocks to increase. Likewise, the length of time required to execute sale of a property also remained the same as in the previous survey, i.e. 78 days.
Miles Shipside, Rightmove’s commercial director, said the other factor for more sales is that “sellers were being more realistic with their asking prices” eager as they were to boost sales in the biggest slump in many years.
He also felt that “continued realistic pricing is critical to keep the momentum going”.
Currently most people trying to get on the property ladder simply cannot afford to or simply do not think the time is right. This is due to unrealitic house prices and economic situation; looking at the Britsih economy it is difficult to see how anyone leaping onto the property ladder regardless of how much they may be stretched would attain positive equity status. The fear of course is that prices drop further and the value of the property becomes less of that paid.
Indeed from a third party perspective it seems that prices would have to drop further and the economy would have to improve before any recovery happens. As Britain is a property driven economy, with positive equity used to finance purchases of luxuries, consumables and the like it is difficult to see any thing but further downward movement.
|
|
|
|
|
|
Print this Story
