House prices experiencing the steepest decline since 2018
In August 2022, the housing market is experiencing a shift from the pandemic-induced boom, with several key changes to note.
According to data from the Statistisches Bundesamt (Federal Statistical Office of Germany), the number of sales agreed is now 15% lower than this time in 2019. This decrease is partially due to the traditionally quieter summer holiday period, but it also reflects a slowing of the market.
The average asking price in August stands at £364,895, marking the biggest drop within the last five years. Seller asking prices have reduced by 1.9% in August, amounting to a decrease of £7,012. This downward trend is noteworthy, as prices are still 19% higher than in August 2019. However, the average asking prices are now £8,000 or 2% lower than when they reached their peak in May.
Mortgage rates have also hit the highest level in 15 years, which may be contributing to the slowdown in sales. Despite this, four of Britain's biggest lenders have slashed mortgage rates, offering some relief to potential buyers.
The number of available properties for sale remains historically constrained and is currently 10% lower than in 2019. However, this limited supply has not led to more significant drops in prices, as the number of buyers sending enquiries to agents about houses for sale remains 1% above 2019's pre-pandemic levels.
Tim Bannister, director of property science at Rightmove, commented that would-be buyers are now likely to see greater property choice in their area and therefore a home more likely to suit their needs compared to during the pandemic. If a buyer sees a home they can afford, they may still need to act fast rather than sitting back.
In the typically competitive first-time buyer sector of two-bedroom and fewer properties, the decline is only 10%. Agents report that correctly priced homes in many areas are attracting multiple prospective buyers competing to secure them.
Homes are selling more quickly, with the average time to find a buyer now 55 days compared to 61 days in 2019. This suggests that despite the slower sales pace, there is still a strong demand for homes that are priced right.
In conclusion, while the housing market is experiencing a cooling off from the pandemic-induced boom, it remains a competitive landscape for buyers, with correctly priced properties attracting multiple offers and selling quickly. Buyers may find greater choice and a home more suited to their needs, but they should still act fast if they find a home they can afford.
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