Homebuyer enquiries in Wales fell sharply during August as the cost-of-living crisis and wider economic challenges affected market conditions, according to surveyors.
The Royal Institution of Chartered Surveyors (RICS) said house prices in Wales continued to rise, although at a less firm rate, but enquiries, sales and new instructions fell, marking a downturn in activity that has been evident for several months.
In the RICS' latest residential market survey, new buyer enquiries fell for the fifth consecutive month with a net balance of -64% of Welsh property professionals recorded, down from -49% in July.
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Agreed sales saw a net balance of -24% in August, down from -13% in July. Sales predictions for the three months ahead also slipped further into negative territory at -38% in August compared to -24% in July.
Looking to the 12 months ahead, sales expectations are also the most downbeat they have been in the last four months, with a net balance of -50%.
However, the shortage of available housing is continuing to push house prices up.
The RICS said the continued lack of homes coming onto the market was illustrated by the fall in new instructions, at -15%. These low stock levels are a crucial factor in causing house prices to continue to rise.
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As a result, a net balance of 44% of property professionals reported an increase in house prices in Wales during August, down from 52% in July, but still well above the long run average.
According to the latest Halifax Price Index, house prices across Wales increased by 16.1% annually in August - the highest level of growth since early 2005. This means average prices in Wales have risen by £31,246 over the past year, with an average property now costing £224,858.
Across the 海角视频, property values were up by 11.5% annually in August, with a typical property now costing a record £294,260, Halifax said – but its report warned that "a more challenging period for house prices should be expected".
Looking ahead, RICS said the survey's indicator for price expectations in Wales over the next three months is now flat at readings of 1%, down from 9% in July.
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A "flatter picture" is also emerging in the 12 months ahead, RICS said. 12-month price expectations have eased in recent months, from a net balance reading of 78% in April to a figure of just 5%.
Charlotte Burles Corbett of William Parkman and Daughters, which is based in Caerphilly, Newport and Cardiff, said: "Enquiries for property sales have slowed down towards the end of the summer months but we expect demand to increase again into autumn. Concerns with the economy and rising inflation remain a risk to the market."
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Tony Filice of Kelvin Francis in Cardiff said: "There is still a high level of activity. Increased numbers are listing their properties. Viewing levels are good and attractive properties still generate high interest. However, vendors are now considering offers and there are fewer ‘best and final’ bids."
Tarrant Parsons, senior economist at RICS, said: "Concerns over the economic backdrop and rising interest rates continue to take their toll on market momentum, with strong activity early in the year now giving way to a more subdued picture.
"Moreover, given projections for the 海角视频 economy point to a potential recession emerging towards the end of 2022, respondents envisage housing sales continuing to slip in the coming months. For the time being at least, the lack of stock available on the market is still providing support to house prices, which continue to rise, even if the pace of growth has cooled over recent months."
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