I’m hearing a lot of chatter about banks easing up and money flowing more easily in the property market, there seems to be a view that money is easy to come by. This is then seen as pushing up prices because people can afford to spend more and compete for purchases. In actual fact this does not seem to be the case and mortgages still appear to be very limited. The flow of money is restricted.
But if what I am suggesting is true why are prices still rising?
I read an article today celebrating the fact that the numbers of houses being sold has reached levels last seen in 2009. That is 848,000 house sales. To people outside of the industry this must sound like a large number and be indicative of a booming market.
Dorian Gonsalves Director (Commercial and Franchising) at Belvoir refers to this reality as a ‘half market’. He says “In 2006 1.7m houses were sold and in 2007 1.6m houses were sold. To an Estate Agent it is the volume of sales that is measured not just the value of the property. If you have a lack of houses coming onto the market for sale and a lack of new properties being built and demand remains constant or increasing, property prices will rise.”
The housing market, like many others, is dictated by the law of supply and demand and the current rise in prices is being heavily influenced by the lack of homes for sale.
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