Written By Polly Greenway, CEO of DOMVS Estate Agents in Dorset
Has the Property Market Reached its Peak?
In the absence of a crystal ball it’s difficult to definitively know if the property market has reached its peak, but as experienced estate agents in Dorset, who work at the coalface and track market activity closely, we feel we’re in a great position to share our insights and thoughts.
And yes, for the record, we believe the market has, for now, reached its peak!
At the time of writing, the ONS’ latest figures reported an annual 16.9% increase in house prices up to May 2022 for the South West. This represents a staggering hike in values and something we haven’t seen for many years. This is entirely due to the supply of available properties for sale not meeting the strong demand from buyers.
Aligned to the ONS, our ‘supply and demand’ figures were also at their peak in May, with 76 buyers registered for each available property. However, since then, the imbalance has started to return to more normal levels, with 41 buyers now registered for every property (as of the start of August 2022). Whilst this feels like a dramatic fall, the new figures represent a much healthier ratio, in which sellers will continue to attract great offers.
In the height of the Spring market, properties were selling within a matter of days, leading to many disappointed house buyers missing out on their dream home. Now, estate agents are having to work that much harder to secure the right buyer, at the right price, with negotiations tending to take a little longer. Further proof that the market has reached its peak and this will likely be represented in future data, from the likes of the ONS, once they have caught up.
Right now, the market is reassuringly active and as our team reported to me this morning, we have a steady flow of new instructions to replace the properties we have sold, meaning the supply issue is now easing.
We’re not perturbed by the market calming – in fact, it’s in markets like this that homeowners really appreciate the importance of having an experienced, skilled agent to act in their best interests. Agents who simply list their properties on Rightmove and wait for the phone to ring (not mentioning any names!) do well when the market is hot, but should be avoided at all costs when the market toughens.
A changing market can be unsettling for those looking to sell or buy, especially for first-time buyers. Movement in house values will be relative for those looking to buy and sell at the same time, but for those who are doing it for the first time, nerves can be stifling. To first-time buyers, we are saying this: whilst we believe the property market has reached its peak, we do not feel that prices will fall as there is still significant demand. And less competition for properties also makes for a less frustrating process! Even if property prices do soften slightly, which is unlikely, the long term benefits of being on the housing ladder, will always far outweigh any potential pitfalls.
If you’re considering selling a property, and want to find out how much your property is worth, we’re always available for a chat. Or you can click here for an instant valuation of your property.