There are tentative signs that property prices might again start to weaken. Discount on houses sold at auction have recently started to widen.
From the FT....
Hopes that the housing market has emerged from slump may prove premature, after a leading indicator of house prices suggested fresh weakness ahead.
The median discount on houses sold at auction compared with their value in the conventional market rose to 18 per cent in July from 13 per cent in June and 11 per cent in May, research published today shows.
The second consecutive month of increasing discounts on auction properties could point to a further downturn in house prices.
Auction prices should provide an early warning sign of changes in house prices because most sales close within a day and many sellers are under pressure to dispose of properties, providing a "mark-to-market" value of what properties are worth.
Prices in the normal market can take much longer to adjust as sellers and agents are slow to realise prices have risen or fallen, while the transaction process is much slower.
This points to a shrinking pool of cash rich buyers - most of them have already shot their bolts. Also, those with a bit more nous are realising that prices are likely to start dropping as autumn approaches and the spring/summer bounce dries up.
ReplyDeleteShame the Land Registry does not take auction prices into account.
ReplyDeleteSweet find, though.
Not correct - the Land Registry does take some auction prices into account. They don't take account of sales following a repossession though - whether through an agent or at auction. They also don't take account of sales that involve companies.
ReplyDeleteGood find. Is there somewhere we could look and see this data on a regular basis in future?
ReplyDelete