In the final episode of the second season of The Home Stretch podcast, Iain McKenzie, CEO of The Guild of Property Professionals, is joined by property market analyst and Head of European Housing and Building Materials at the Royal Bank of Canada, Anthony Codling, to discuss what has been unfolding within the market during the second quarter of the year.
In previous episodes Codling had made several predictions regarding what he thought we would see in the property market during 2023, so is the market playing the game and reacting as predicted?
Looking at transactional volumes, Codling predicts that there will be around 960,000 housing transactions by the end of the year, which is down by 20% on the figure seen during 2022. “So far to May there has been 432,000 transactions versus 545,000 transactions during the same period last year, which is down 21%. While there is a lot that can still happen in the second half of the year, as of now the prediction looks fairly accurate,” Codling comments.
He adds that if one looks at mortgage approvals as a lead indicator of housing transactions, from January to May there were 235,000, so much lower than the transaction levels due to aspects such as timing delays, but it also shows just how many cash transactions there were in the market during that period. “In the last five months of 2022, so August to December, there were 280,000, so that not much more that what we have had during the first five month of this year. Based on this, I think it is not too of an ambitious target to stay around the 20% below 2022 target,” says Codling.
According to Codling house prices partly feed into the transactional volume. “If the peak was September last year at just under £294,000, then we are down 2.5%. And bizarrely, house prices have actually gone up this year if you look at the latest data released from Halifax. I think this is testament to how robust the market is. If the market really was as weak as many predicted, house prices would be tumbling but they are not. Even with all the talk there has been of weakness in the market, we are still £47,000 higher on average from where we were during the first lockdown,” he adds.
In response, McKenzie says: “What frustrates me is that consumers are being feed one side of the rhetoric. This is why I say that an agent’s job to help consumers make an informed decision by giving them the correct information. There is a lot of headline grabbing articles that may be scaring people out of the market, when the data and truth of the matter is very different.”
Codling and McKenzie go on to discuss several other aspects around the property market and what the data is telling us, and his predictions for the remainder of the year.
To hear more of the conversation, visit The Home Stretch podcast.