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There has been as significant increase in the number of properties listed for sale north of the border as a sellers look to cash in now before house prices potentially fall.
According to DJ Alexander, the number of properties currently advertised for sale has increased by 75% in parts of Scotland when compared with the corresponding month a year ago.
The estate agency, part of the Lomond Group, found that the number of properties advertised for sale has increased by 75% in Glasgow when comparing February 2022 with February 2023; up 37% in Perth; 34% higher in Edinburgh; 28% greater in Dundee; 25% up in Inverness; and 10% down in Aberdeen.
The number of properties for sale peaked in December 2022 but remains substantially higher than last year with the greatest increase in volumes among detached properties with a year-on-year increase of 253% in Glasgow.
The volume of detached properties advertised for sale increased in most cities in Scotland increasing by 148% in Edinburgh; up 124% in Dundee; and by 114% in Perth, with Aberdeen and Inverness bucking the trend with relatively small increases in numbers.
David Alexander, chief executive of DJ Alexander, explained: “This may seem surprising that at a time when many are predicting a substantial downturn in the market that there should be such an increase in the number of properties advertised. This could be precisely because many sellers are expecting price falls and are trying to sell before this occurs.”
“It could also be people who are anticipating a hike in their mortgage payments and are selling before higher payments impact upon them. Of course, more properties advertised for sale at any one time usually results in lower prices as supply exceeds demand, but we are finding that the market remains very buoyant despite continued negative forecasts from the doom-mongers.”
He continued: “There may be a bit more realism among sellers about price setting but there are still a lot of buyers in the market. This is undoubtedly because we have record levels of employment, clear signs that the projected recession is going to be less severe than anticipated, and that inflation appears to be falling already and will be substantially lower by the end of this year.”
“The factors which previously produced a dramatic fall in house prices are largely being addressed by the government and the mood music from the Bank of England has shifted from despair to cheer in a matter of months. Indeed, the statement this week from the Halifax that prices have started to stabilise has once again surprised a market expecting a period of prolonged price falls.”
Alexander predicts that a property price correction will occur, with values expected to drop 8- 10% peak-to-trough.
He added: “Given that average prices in Scotland have risen by 27.1% from March 2020 to November 2022 this is barely a correction. This level of price drop would return average prices to June 2021.
“Although any fall in prices can be alarming to the market if the drop is only 10% against recent increases of 27% then I think we may be needlessly worrying homeowners.
“A 17% increase over a 33-month period is still a considerable rise in historic terms and such a fall may be needed to maintain affordability as prices have far outstripped wages in recent years.
“The key message is not to panic, if you were thinking of buying or selling anyway then simply get advice and check out the market. The worst thing to do with property is to try and pre-empt or second guess the future direction of prices.
“When you try to outthink the property market it almost always ends badly. Much better to take a step back, reflect on your circumstances, and then look at whether now is the time to move or to stay put.”
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