Scales tipping as demand outstrips supply again

penguine

An article from the Observer looking at why there don't seem to be enough houses on the market at the moment to meet demand: cost of HIPs, sellers holding out thinking prices are going back up, etc.

Surprisingly, there's a couple of estate agents quoted in the article saying they don't think the bottom has been reached yet.

Keith Spencer at Newland Rennie Wilkins in Abergavenny in Wales ... says there is a "reasonable level of buyer inquiry, but lack of new instructions, especially given that this should be the busy time of year. Prevailing sentiment is that it is not a good time to be selling, and lack of confidence of vendors in their employment position means that they are not looking to trade up."

As for house prices, Spencer believes it is rather early to say that they have reached a bottom. "At the moment there are transactions taking place. I think it's too soon to say that prices are rising, but we are now at a point where we have two or more people competing for the same property.

"People are increasing their bids, but they are still not paying as much as the asking price. Few properties are making more than the asking price."

He is now worried about the lack of new stock coming onto the market. For Newland Rennie Wilkins, June is traditionally a month where a "flood" of properties are put up for sale, but so far they have only had a "steady trickle".

1echidna

I wonder whether if people think it is the bottom of the market it will be a time when sellers hold off if they can and conversely buyers, again if they can, pitch in. Psychological factors at play in a market recovery?

ruggedtoast

penguine wrote: »

An article from the Observer looking at why there don't seem to be enough houses on the market at the moment to meet demand: cost of HIPs, sellers holding out thinking prices are going back up, etc.

Surprisingly, there's a couple of estate agents quoted in the article saying they don't think the bottom has been reached yet.

Its not really surprising. British people will, in many cases, borrow as much as they are allowed to in order to buy property, without much concern as to whether or not they can afford it.

The amounts that they can borrow are markedly reduced since 2007, which will contain significant rises in overall prices, and in all probability lead to further falls.

Estate agents are also well aware that a lot of the "buyers" they have at the moment are not in a proceedable position, and will be whistling for the mortgages they want.

Wookster

Yup, there is a limited supply of houses and an infinite demand therefore any price is justified...



errr...

penguine

Wookster wrote: »

Yup, there is a limited supply of houses and an infinite demand therefore any price is justified...

errr...

That's not actually what the article was saying. Only that at the moment, there is more demand than there is supply, due to certain factors which may well be temporary.

nearlynew

But don't forget - desire is not the same thing as demand.

Demand requires an ability to pay.

Davesnave

Abergavenny is a very desirable location and there's a shortage of some types of property within the area at the best of times. Not exactly a typical place for a 'snapshot' view IMO.

Put it another way; I couldn't find anywhere there!

Generali

nearlynew wrote: »

But don't forget - desire is not the same thing as demand.

Demand requires an ability to pay.

Correct.

IMO of course.

ad9898_3

First-time buyers are "back in force" as their parents are helping them with deposits

This kind of talk disturbs me somewhat, isn't this the ponzi scheme feeding itself ?, what is the point of making a packet on your house as you get older, when, some years down the line you have to give your paper wealth back to your offspring so they can buy a property with the same money ? Insane.

On the other issue of supply and demand, maybe some other posters could post infromation in their area so that we may get a picture, because the supply/demand issue just isn't there in my area. The facts are.....

32 houses have sold in my area this year, there are 230 on the market, average selling time 267 days. I've said it before but it's worth repeating, if the price is too high there is no demand.

Example, would most people in the world who like cars want a Ferrari ?, the answer is yes, demand is stopped from outstripping supply by raising the price to the point where only a few can afford.

Same with housing, price too high, doesn't matter how nice the house is, the demand will be nil.

Chris2685

More demand than supply?

The thousands of houses for sale on Rightmove says otherwise :S

ad9898_3

The 'demand' is for houses to become cheaper so that you don't have to sell your @rse to afford one, there is no demand for highly priced houses, only for affordable ones, hence a few more people jumping in with the 15-20% off the indices plus another 10% on average coming off the asking price (Rightmove say this, not me), making a nice round 25-30% off peak, not bad when the full effects of the recession, IR hikes and tax hikes have yet to make their impact.