NAEA market forecast - Spring 1998

Property Management

ISSN: 0263-7472

Article publication date: 1 December 1998

35

Citation

(1998), "NAEA market forecast - Spring 1998", Property Management, Vol. 16 No. 4. https://doi.org/10.1108/pm.1998.11316dab.009

Publisher

:

Emerald Group Publishing Limited

Copyright © 1998, MCB UP Limited


NAEA market forecast - Spring 1998

NAEA market forecast ­ Spring 1998

Homebuyers can look forward to a steady, stable housing market over the next two years but estate agents will find trading conditions tough and competitive, the National Association of Estate Agents (NAEA) predicts.

Although the NAEA suggests house prices will rise by 5 per cent in 1998, very little growth is expected in the overall level of house-purchase transactions ­ the lifeblood of the market. (There were approximately 1.44 million housing transactions in 1997. It is estimated by the NAEA that this will grow to 1.46 million for 1998.)

The NAEA's first Market Forecast for 1998 estimates that transactions will only increase by 1 or 2 per cent per annum in the run up to the millennium. Properties for sale are already in short supply due, the NAEA report claims, to home-owner concerns about negative and insufficient equity, interest rates, and job security. The NAEA's Market Forecast is based on data and information taken from official, accredited sources including the NAEA's own surveys. It is produced in collaboration with the NAEA by industry and economic experts. The next NAEA Market Forecast will be published in the autumn.

"With demand continuing to outstrip supply, estate agents will be forced to hone their existing customer offering and provide the very best professional service to compete successfully. Linked to what we believe will be a relatively stable period within the housing market, this means that conditions are going to be very favourable for those selling a home prior to the millennium", said Hugh Dunsmore-Hardy, chief executive of the NAEA.

The NAEA Forecast has more good news for house-sellers. It expects mortgage rates to remain unchanged for the rest of 1998, and then fall back throughout 1999 with fixed rate products continuing to increase in popularity.

For those home-owners waiting to see big increases in their property value, now is the time to move, the report confirms. The rate of growth in house prices is expected to edge downwards, although the forecast still predicts year on year gains above current prices.

The NAEA Forecast also dispels suggestions of a "booming housing market". "The housing market in 1997 experienced strong growth from a very low starting point. Talk of a boom was a gross exaggeration of events", it states.

This was confirmed by practising estate agent Andrew Jeffery, President of the NAEA. "In some areas, such as London and the south-east, house prices may have got back to their 1989 peak level during 1997 but, allowing for factors such as inflation and so on, in real terms they are still some 30 per cent below their peak.

"In addition, the ripple effect from London and the south-east has failed to materialise. While our forecast predicts some narrowing of the north-south divide in 1998, many areas of the country are yet to experience significant market growth and will continue to under-perform, set against the activity expected in London and the south."

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