Property Market Report August 2022
We have always tried to be honest and factual when it comes to reporting on the local property market and this latest Summer 2022 report will be no different.
We tend to use genuine historic like for like data usually making direct comparisons between the current market and the previous year, which gives us a good idea on market trends and values. None of us have a crystal ball unfortunately so there is always an element of guesswork when predicting the future of any market. Having said that, Manxmove collectively have a huge amount of local property market experience so we are not normally very far away when predicting the market. This can be confirmed by looking back through our previous reports.
The fact of the matter is the market has cooled slightly over the last 6 months which is actually really good news for our property market. Why is it good news ? Our market has been manic over the last few years with some properties rising in value by 20% per annum. With normal healthy market growth being around 5% these 20% rises are simply unsustainable in the long term. A market that continues to rise at this unusually high rate over a period of several years is far more likely to crash. Stock levels have been at an all time low so a cooling in the market should also allow stock levels to recover and hopefully return to more like the levels of a normal healthy market. This will provide more choice for purchasers and therefore less aggressive competition over properties, which thankfully may mean less gazumping.
The following factors that have been fuelling our market over the last few years remain largely unchanged. Firstly there are very few properties for sale and there is a crucial supply and demand situation. Manxmove normally hold a stock of around 280 properties for sale but at the time of writing this report this figure is around 50. This means we have fewer properties for sale, but it doesn’t mean we are selling fewer properties as new listings are still coming to market, it’s just that they are selling so fast they are not staying in stock. Whilst interest rates have risen rates are still very low meaning you can still purchase a property for a similar monthly figure that you would be paying to rent it. First time buyers are still urgently trying to get on the ladder as they see the market forging ahead with some homes increasing at £4000 a month over the last 2 years. Long term tenants are also seeing a move in the market and some are coming out of rented homes and purchasing. Investors are still confident in the market to invest in buy to let properties and the healthy rental market makes this a really good proposition. There are also still healthy numbers of off Island purchasers keen to relocate to our shores. It is for these reasons that, in our opinion, whilst our local market may cool it is unlikely to crash.
From a purchasers point of view it is still a good time to buy, as a cooling in the market means that prices will still be rising, just not at the same ludicrous levels as the last few years. Also, more stock will mean more choice and less urgency which is no bad thing as some purchasers have had to make snap decisions on the biggest financial commitment of their lives. If you are selling locally to buy locally the price to swap will remain the same if you are selling in exactly the same market that you are buying in. If your house goes up in value so does the one you are buying. First time buyers do not have the luxury of selling a home that has substantially increased in value though so they would be wise to get on the ladder as soon as possible.
From a sellers point of view there has never been a better time to sell in our opinion as we are unlikely to experience 20% annual price rises over the next few years unless something drastic happens to one or more of the above factors. You can see now on agents websites that there are currently a lot of price reductions which again is one of the first signs of a cooling market. Price reductions on new listings are usually due to unrealistic initial asking prices as opposed to price drops. In any market competitive pricing is still the key to a quick sale. Properties that are marketed at way beyond even what our incredibly healthy market will stand are unlikely to sell and invariably have to be reduced, therefore potentially missing the new listing activity that properties receive during the first 2-4 weeks of marketing.
A very interesting market then to say the least. Whilst business is brisk as we remain in a healthy sellers market, personally I much prefer a more challenging buyers market where you have to think outside the box and come up with innovative new marketing ideas for our vendors. Manxmove have only ever employed experienced and National Federation of Property Professionals Qualified Estate Agents as we feel when it comes to selling normally their biggest personal asset, this is what our customers deserve. If you require any help or advice on any aspect of your property requirements please give us a call on 619966.