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Cinzano Bianco

Rics: House Prices Forecast To Rise

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Ok, I don't really get it. Do RICS only consider data from some inexplicably short period of time, rather than trends? Do they consider the state of the overall economy at all?

They seem to like the simplistic version of the idea of supply and demand in the housing market too.

But then at the end, they seem to say, "actually it probably wont last". So, is this just a bit of short term ramping...


House prices are forecast to rise for the first time since before the credit crunch hit, according to the latest report from the Royal Institution of Chartered Surveyors today.

The Royal Institution of Chartered Surveyors (Rics) survey is seen as a key barometer of the property market's fortunes and while it shows prices still falling, agents expect decreases to tail off and prices to rise in the next three months.

Rics' report has shown a dramatic turnaround this year, with just 18.1% more surveyors reporting falling house prices in June, compared to 76.2% in January.

This is the most positive reading for prices since September 2007, but improvements are coming from record lows with agents still only selling just over one property per week.

The prediction that prices will rise follows a run of more positive datas for the property market in recent months.

However, a report released today by accountants PricewaterhouseCoopers says this may be a 'false dawn', with prices falling further next year and flat in 2011.

The study suggests the market may not recover its highs until 2020 or beyond.

Rics says a shortage of properties for sale and growing buyer interest led to the balance of surveyors who believe prices will rise over the next three months turning positive for the first time since May 2007.

Its survey showed 6% more of its estate agents expecting prices to increase than decrease, compared to a reading of 11% more predicting prices to decrease in May.

The group said the rise in optimism 'has been driven by the continuing up-turn in buyer enquiries and falling levels of fresh supply.'

This rebound in potential buyers has begun to lead through to sales, with Rics agents selling on average 12.7 homes in the three months to June, up from 11.7 in May, and a low of 9.8 in February and March.

Rics spokesperson Jeremy Leaf said: 'Although the market is showing signs of improvement, it is unlikely that there will be a sustained upturn while mortgage lenders remain risk adverse. A lack of stock on the market is providing a platform for modest price increases.

'While supply remains tight, the market may continue to show tentative signs of firming but instructions are starting to increase in some regions and this could dampen any meaningful recovery as long as economic conditions remain quite so uncertain.'

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