What goes down must come up
In actual fact according to the Halifax - the authors of the report behind the headlines – the October price increase was three times faster than expected and means that house prices are 1.2% higher than they were a year ago.
Apparently analysts had only expected a rise of 0.6%. I however hadn’t. Regular readers of my blog will know that I have for some time refuted the coverage of the Royal Institute of Chartered Surveyors (RICS) surveys which most recently claimed that when asked 44% of its members had reported a fall in selling prices over the last three months..
I said at the time that we were seeing glass half empty reporting. For a start only 265 estate agents were surveyed for the RICS report – and of that number – more than half actually thought the housing market was doing ok.
Back then I’m not sure what else the housing market could have been doing. Ahead of the long awaited October spending review the housing market was hardly likely to see any sort of boom was it?.
Cruciallythe last set of RICS stats were taken from the summer months when the property market is always a little subdued. Writing thenI said that the slight dip was because everyone had jetted off to Faro – and people were worrying far more about topping up their tan than increasing their square footage.
Looking at the Halifax I was right – which is always a good feeling isn’t it!
In short we are seeing the kind of market one would expect at this time of year - and in these economic conditions. One month it’s a bit up the next it’s a bit down.
You’ve got to take a long term view. House prices are up on this time last year. And no one with any common sense is saying that house prices are going to drop off a cliff next week and never ever recover.
As even Halifax housing economist Martin Ellis said; “We do not believe that prices are set to fall sharply over a sustained period.”
Some months back Justin Knight of Bective Leslie Marsh summed up the situation rather well saying:
“The market has levelled after a spring bubble and continues to trade level. It would be helpful if the press could manage to correctly comment on the market confirming it to be level and showing no sign of growth or fall.”
He was right then and is right now. House prices are well stable. It doesn’t make for a good headline but it’s true and our experience of the new homes market echoes this.
Over the next few months we are going to see movement by a % here and a % there. And we have all got to stay calm. Interest rates aren’t going anywhere the country hasn’t got enough houses and we haven’t got the policies in place to change that (yet). Affordability supply and demand will govern the market long term protecting our assets over this decade and beyond.
So as far as the property market is concerned what goes down must come up – and thank you to the Halifax for demonstrating this to us so neatly.
Sue Warwick - National Sales & Marketing Director Miller Homes