Key Takeaways
- UK asking prices jumped 1.2% in May, reaching an average of £378,304 and signaling "surprisingly strong" market confidence despite high interest rates.
- New Zealand’s services sector remains in contraction at 48.9, though the pace of decline eased from March as new orders showed a slight expansion.
- Geopolitical tensions escalated as a massive Russian drone attack struck residential buildings and port infrastructure in Odesa, Ukraine, injuring several civilians.
- UK mortgage rates showed signs of easing, with average 2-year fixed rates dropping to 5.18%, providing a much-needed boost to buyer affordability.
- Global shipping disruptions in the Strait of Hormuz and rising fuel costs continue to weigh heavily on service-sector activity in the Asia-Pacific region.
The British housing market showed unexpected resilience in May as new seller asking prices rose by 1.2%, according to the latest data from Rightmove (RMV). This monthly increase exceeds the typical 1.0% seasonal rise seen over the last decade, pushing the average price tag on a home up by £4,333. While annual prices remain 0.3% lower than a year ago, the narrowing of this decline suggests a stabilizing market.
Buyer confidence has been bolstered by a slight retreat in borrowing costs, with the average two-year fixed mortgage rate falling to 5.18% from 5.42% just a month prior. This shift has reportedly saved the average buyer approximately £50 per month in mortgage payments. Major UK housebuilders, including Barratt Developments (BDEV), Taylor Wimpey (TW), and Persimmon (PSN), are closely monitoring these trends as buyer choice hits an 11-year high.
However, a notable "North-South divide" is emerging in the UK property sector. While the North East and North West of England saw annual price increases of 2.7% and 2.6% respectively, London and the South East experienced annual falls of 2.4% and 1.6%. Rightmove (RMV) warned that over-optimistic pricing is leading to longer selling times, with properties requiring price reductions spending an average of 127 days on the market.
In the Asia-Pacific region, New Zealand’s economy continues to struggle with the Performance of Services Index (PSI) coming in at 48.9 for April. Although this is an improvement from the 46.2 recorded in March, any reading below 50.0 indicates a contraction. BusinessNZ reported that more than two-thirds of respondents cited negative conditions, primarily driven by surging fuel prices and shipping delays linked to the ongoing conflict in the Middle East.
Geopolitical risks remain a primary concern for global markets following a "massive" overnight drone attack on Ukraine’s southern Odesa region. Governor Oleh Kiper confirmed that Russian drones struck a five-story residential building and a car dealership, while also damaging critical port infrastructure, including a warehouse and administrative buildings. The Ukrainian Air Force reported intercepting 279 out of 287 drones launched in the latest wave of strikes across the country.
These developments highlight a fragmented global economic landscape where local resilience in sectors like UK housing is being tested by persistent geopolitical instability and inflationary pressures. Investors are increasingly focused on how these external shocks will influence central bank policies and consumer sentiment in the coming months.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.