To predict the
future, we must take reference from the past!
Over the last 12
months, Heath, with an overall average price of £233,600, was similar in terms
of sold prices to nearby Birchgrove at £229,800, but, as one would expect, was
more expensive than Cardiff as a whole at £205,400. Most of the properties
selling in Heath over the past 12 months were terraced properties which on
average sold for £211,900. The most
expensive was a lovely 3 bed terraced (with additional loft room) and many
original features including the lovely tiled floor in the hallway for £275,000.
Interestingly, the same property sold in 2002 for just under £130,000, a rise
of 115.4% which is quite impressive when compared to the Cardiff average of
103.2%
Looking at Semi
detached properties in Heath, this type
of property had an average sold price of £281,300. A lovely example of a bay
front inter war semi was on Cefn Carnau Road, which sold for an impressive
£380,000 just before Christmas. It has the loft converted to make it a 4 bed
and was beautifully presented inside. The property sold previously for £215,000
in 2005, meaning a rise of 76.7%. Impressive when the Cardiff average was a
rise 25.6% over the same time frame.
These strong prices
all bode well for Heath, especially after the country leaving the EU. Most of
the phone calls and emails I received in the last week or so are all about
Brexit and what will happen to t=property prices in
Heath.
Confidence and
Interest Rates are the killer questions and quite linked. Since 2009, interest
rates have been at 0.5% and lots of people have become accustomed to those
sorts of levels. However, interest rates in the 1986/88 property boom were on
average 9.25%, in the 1990’s they were on average around 6.5% and uber-boom
years (when UK property values were rising by 20% a year for three or four
straight years across the UK) .. 4.5%. Many of you reading this who are in
their 50’s and older will remember interest rates at 15%.
Indeed, I
suspect interest rates won’t rise (and will probably drop), as Matt Carney (Chief
of the Bank Of England) knows, raising interest rates causes deflation – which
is the last thing the British economy needs at the moment. In fact they have
been printing money (aka Quantitative Easing) for the last few years (which
causes inflation) to the tune of £375bn. A bit of inflation because the pound
has slipped on the money markets (not too much mind you) might be a good thing?
.. because
whilst property values might drop in the country, they will bounce back.
In previous
house price drops, the better areas (like Heath) have always performed better
on the bounce back. So if they do drop slightly in the coming months, it’s only
a paper loss.. as it only becomes real if you sell. And if you have to sell,
again as most people move up market when they sell, whilst your property might
have dropped by 5% or 10%, the one you want to buy would have dropped by the
same 5% to 10% .. and here is the best part – (and work your sums out) you
would actually be better off because the more expensive property you would
be purchasing would have come down in value (in actual pound notes) than the
one you are selling.
The British
population will still increase at a rate that will exceed the current property
building level. Britain is building 139,600 properties a year, the country needs to build about 250,000 properties a year to even
stand still, and as the
birth rate is increasing, the population is living longer and just under a
quarter of all UK households now are occupied by a single person demand is only
going up whilst supply is stifled.
