With mortgage rates going down in the third quarter, property asking prices jumped in the last three months on hopes of renewed activity.According to property development consultants Hass Consult, the rental market largely absorbed the price increases of the third quarter, while properties for sale recovered from their lowest levels in two years driven by a renewed uptake of stand alone houses during September.

Hass Consult announced this as it unveiled its third quarter property indices and drew on new “activity” indicators based on levels of real estate enquiries, viewings and completions.

Asking prices up

Overall, sales asking prices rose by 5.1%, with the sharpest rise in apartments, up 3% on the previous quarter, followed by stand alone houses, up by 3.4%. Price rises were more moderate for town houses, with sales picking up sharply in September, but activity dropped significantly for stand alone houses and apartments.

“We believe it is a correct analysis that as mortgages become more affordable and available, pent-up demand for property buying will bring higher levels of sales activity. However, with property so fully priced in this market, sellers seeking higher returns ahead of that surge in demand deterred some buyers in July and August rather than securing greater revenues,” said Sakina Hassanali, Head of Research and Marketing at Hass Consult.

“The swelling in demand for rentals as those who would have been first-time buyers have stayed in the rental pool, even as new entrants arrive, is fueling some continuing rent rises, although we do see signs of some slowing in viewing and completions,” said Ms Hassanali.

She added that rental adjustment was overdue for many landlords, after some years of stagnating rents, and is now closing the gap in returns for mortgage-financed landlords that appeared after the mortgage rate rises.