The RICS UK House Price Balance - Trending Up For Now The RICS UK House Price Balance
(Released this Thursday 14th Mar 2024 for Feb month)
The Royal Institute of Chartered Surveyors (RICS) House Price Balance is a monthly survey that indicates whether more or less surveyors expect housing prices to rise or fall in the U.K. housing market. A positive net balance suggests house price increases, while a negative net balance implies price decreases.
The RICS provides valuable insight into the UK housing markets trend and helps gauge the direction of house price movements whilst also offering insight into consumer spending.
The Chart
The RICS House Price Balance is calculated as the proportion of surveyors reporting a rise in housing prices minus the proportion reporting a fall in prices.
It reflects the expected monthly change in national house prices.
Positive vs. Negative Net Balance:
A positive net balance indicates that more surveyors expect price increases, signaling a robust housing market. A negative net balance implies that more surveyors anticipate housing price decreases, indicating a fragile housing market.
Green Area 🟢 = More Surveyors Reporting an Increase in House Prices
Red Area 🔴 = More Surveyors Reporting an decrease House Prices
Grey Areas ⚫️= Recessions
▫️ The RICS fell sharply from April 2022 down to the 0% level in Oct 2022. This was a leading indication of a downward trend UK House market prices (falling from 78% in Apr 2022 to 0% in Oct 2022).
▫️ The RICS fell into the red zone from Oct 2022 forward indicating that houses prices from this date were in net decline (per surveyors responses).
▫️ Almost 12 months later the RICS reached a low of -66% in Sept 2023. Since this date we have started to trend upwards sharply recovering from -66% to -18.4% today. However we remain in net negative territory indicating house prices are still in declining but not as much as before, a change of trend may forming indicating a move to house price appreciation (not confirmed until we move above the 0% level into + territory).
▫️ The Historic Recession Line on the chart illustrates the -63% level which crossed by the RICS at the onset of the 1990 and 2007 recessions (grey areas on chart). We recently penetrated this level moving to -66% in Sept 2023 which historically does not bode well.
This weeks RICS release will be very revealing and could tell us if we have a continuation of the upward trend for UK House prices or if we we remain firmly in negative territory.
Lets see what Thursday brings, a fascinating little metric to help us keep an eye on the property market in the UK and the to get an idea of UK consumer behavior.
PUKA
