Despite a slowdown in sales activity in the British property market, new-build developers are proving resilient to price adjustments. An analysis by specialist financier Octane Capital reveals that approximately one in eight new-build properties has not found a buyer even after six months on the market. This data suggests that developers are prioritising profitability over rapid sales velocity.
Octane Capital's study is based on an evaluation of 76,500 new-build properties offered on the market over the last six months. A total of 27,600 price adjustments were recorded during this period. Interestingly, only 14.5% of these adjustments actually involved a reduction in the asking price. This underscores developers' tendency to defend their margins, even in a challenging market environment.
Octane Capital's figures suggest that developers are currently more inclined to await a market recovery or utilise other sales incentives, rather than directly lowering list prices. Maintaining prices can be understood as a strategic decision to preserve the perceived value of their properties and not jeopardise future profit margins. However, this leads to longer sales cycles for some newly built properties.
For buyers hoping for price reductions on new-builds, these findings might come as a disappointment. The market currently appears to be characterised by an expectation on the part of sellers who are holding firm on their price demands. This could prompt potential buyers to weigh their decisions more carefully and, if necessary, wait for more favourable opportunities or turn to the second-hand property market.
While the analysis shows a general trend, regional differences in sales dynamics and price setting may exist. Urban centres with high demand could continue to show more stable price development, whereas in peripheral locations or where there is an oversupply, pressure on prices could increase. However, the observed strategy of developers influences overall market perception and could shape the expectations of buyers and investors alike. A more comprehensive analysis of specific regions could provide further insights into these dynamics.
