Slowdown In House Price Growth

News at Newton Fallowell | 20/08/2019



 

  • Housing market confidence is closely tied to the state of the economy and strong employment and rising wages would normally support a confident housing market.
  • However, in the year to June 2019, while weekly earnings rose to 3.6%, house prices increased by just 0.9% over the same period, demonstrating the breakdown in the relationship between earnings and house price growth.
  • Therefore we currently have quite an unusual circumstance. Both the employment rate and wages are rising, yet Gross Domestic Product, a measure of the nation’s economic activity, has weakened, recording a fall for the second quarter and is expected to fall further.
  • So what does this mean for the residential market? Historically we have seen that slower house price growth alongside a strong rise in earnings, has helped improve affordability for homes.


 

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