Sales Market Forecast 2024
It’s no secret, 2023 was a difficult year to sell property.
The sharp rise in interest rates since late 2022 unsurprisingly spooked buyers’ confidence initially, compounded by increasing inflation putting immense strain on affordability which stopped the market in its tracks. This led to a “wait and see” malaise across all sectors of the market whilst buyers and vendors looked for signs of the market stabilising before making any decision to buy or sell, and as property stock piled up, prices started to recede from the heady highs of the Covid property bubble.
We are quietly confident that we have seen the worst of it as we look over our shoulder at 2023. Interest rates are beginning to find their level; in the last few weeks the Bank of England's Monetary Policy Committee (MPC) announced it had left interest rates unchanged at 5.25% for the third meeting in a row and with inflation reducing we may have turned a corner. UK interest rates are predicted to go down to 4.75% by the end of 2024 and towards 4.5% in 2025, we feel these rates are pessimistic and will be closer to 4% rather than 5% by the Autumn Statement.
The elephant in the room locally is why mortgage rates in Jersey are still higher than their UK equivalent offered by the same lender, this is a controversial matter which we hope will have more debate and action in the new year to hopefully align the differential to the UK rates.
The slowdown is not over yet, but we are at the bottom of the curve as we start 2024. Property owners will still need to sell for a variety of reasons and the desire to buy remains very high on most movers’ priority lists which will begin to create pent-up demand. Come the Spring we expect to see the slow return of confidence with the wheels of the market starting to turn again. From personal experience Q4 of 2023 was the best of the year for Le Gallais property sales and we already have a healthy number of sales agreed proceeding to completion in January.
Looking further ahead, we see a slow build through Q1 and 2 as the number of transactions build and values re-adjust down from previous years, as witnessed in our office during Q4. We are cautiously optimistic the number of transactions will improve quarter on quarter as the new year progresses, with the market picking up pace from September ‘24 onward as we all re-adjust our expectations to align with the “new normal” of a stable market.
We all know the property market is cyclical with 2023 the bottom of the most recent dip, that means now is a good time to buy or certainly over the next 3 years if you can afford to as prices adjust down. On the other hand, if you don’t have to sell within the next five years then relax, my prediction is that top of the next spike will be in 2032/33 if you can wait that long (you heard it here first!)
Happy New Year, and give us a call if you need honest and sound advice on how and when to sell your property.