Property prices won’t stop falling in 2011

According to the projections, the downward pressure on property prices won’t disappear in 2011. In all probability, the lack of balance between supply and demand brings about the drop in the house prices by 2 per cent by the end of the next year.

It has been claimed by Hometrack that, after the increase in supply over the last half year period, the insufficient demand will make vendors lower their asking prices or refuse from selling the property on the market.

There can be no doubt that worries among consumers about spending cuts and the instability in economy were responsible for the drop in housing demand by 4.3 per cent in November, which is the most substantial decrease since January 2009.

However, the things are about to change soon because supply starts to experience the fall again.

The first drop in supply for the period of nine months was recorded in November, down 0.4 per cent, which is explained by weak demand due to the fact that many buyers are also potential sellers.

Richard Donnell, of Hometrack, claims that in the nearest future vendors will either be forced to lower prices or withdraw houses from the market.
 


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