House price growth is still well above average, despite higher interest rates. The latest RICS survey shows that although market activity has dropped back, prices are still growing at a strong pace. But with a further interest rate rise predicted for March and dwindling new buyer enquiries, property economists believe prices will continue to ease for the remainder of 2007.
The RICS price balance of +28 still far exceeds the long term average of +12 but today?s report shows prices have cooled in every region since November. Substantial price drops are unlikely, according to market experts.
New buyers are approaching the market with caution but so too are sellers ? the ratio of sales to unsold properties on surveyors? books is at its highest level for almost three years. ?These factors both suggest that house prices may remain supported in the near term, and that house price inflation may be slow to ease,? said Kelvin Davidson from Capital Economics.