House price growth no gathering pace

• House price growth gaining momentum
• Sales expectations strengthen again
• Rents now increasing modestly

The August 2021 RICS/Ci PHMS results point to price growth accel­erating on the back of some sustained positive feedback around sales market activity. Meanwhile, in the lettings market, rental levels have now begun to rise modestly for the first time since prior to the pandemic.

At the headline level, a net balance of +9% of respondents saw an in­crease in new buyer enquiries during August. This remains consistent with the steady growth profile in buyer demand that has been depicted by contributors since the April 2021 results. Alongside this, agreed sales also continued to pick-up, evidenced by a net balance of +10% of survey participants citing an increase. Looking ahead, near term sales expecta­tions rose to post a net balance reading of +32%, marking the strongest return for this indicator since April 2018.

At the same time, the underlying trend for new sales instructions com­ing onto the market remains subdued, with the latest net balance stand­ing at -26%. As such, this combination of rising demand and a slower flow of fresh listings appears to be stoking house price inflation. Indeed, a net balance of +22% of respondents are now seeing prices increase at the aggregate level, representing the most elevated reading for the price growth gauge since November 2018. In terms of expectations for prices over the coming twelve months, a headline net balance of +48% of con­tributors anticipate that price will be higher in a year’s time. Again, this is the strongest reading since back in 2018.

The national confidence index (an amalgamation of near term price and sales expectations) now stands at +24 having improved steadily since turning positive back in March this year. Consequently, this meas­ure suggests momentum behind sales market activity is expected to re­main solid over coming months.

In the lettings market, a net balance of +13% of contributors reported an increase in tenant demand during August. By way of contrast, new landlord instructions continue to dwindle (net balance -21%). Significant­ly, rents are now reportedly rising on the back of this, albeit modestly, with the survey’s rental growth indicator moving into positive territory for the first time since February 2020.

Source: Confidencial Imobiliário 2021

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