4 August 2022
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When will buyers return? Sales of properties are running around 40% down from a year ago, it is taking 13 days longer than a year back to sell a dwelling, prices have fallen 9.5% from their peak, and listings are up 104%.
plenty of owners planning to raise their rents or sell their properties. The dummy was spit but no further action taken. Very few owners are going to end up paying a higher interest rate on their mortgage than they had to prove to the bank they could handle when they signed up for their purchase and debt 1, 2, 3 etc years in the past. The labour market is also exceptionally tight and people owning property are likely to be feeling that if they get laid off they can easily get another job to help service their mortgage.
This situation of deep weakness in the residential property sector has not come about because of a wave of distressed sellers. There is no evidence of a wave of investors selling ever since the tax rules were changed last year despite a special survey I ran with 3,500 responses showing
So, why has the housing market slowed down and gone into reverse? Because the buyers have slipped back into the shadows. Why are they hiding out of sight? Because getting credit suddenly became a lot harder late last year, mortgage interest rose 3%+ over a very short period of time, there was a cost of living crunch, and fears of prices rising and rising disappaited.