Real estate sales and listings volumes show signs of returning to pre-pandemic levels
Since the reopening of the real estate market in July 2020, things have been incredibly busy at all levels. The number of properties coming on the market and the number of sales have hit recent highs with many people moving out.
It appears, however, that sales and listing volumes are beginning to return to pre-pandemic levels.
In its recent report on house prices, the Edinburgh Solicitors Property Center (ESPC) noted that comparing the last quarter (December 2021 to February 2022) with the same period of the previous year, property sales volumes had declined by 20.2%.
The Scottish Registers (ROS) reported a very similar trend in their latest house price index. Comparing real estate sales from November 2021 to November 2020, there was a 20.1% drop. 9990 real estate sales were recorded in November 2020, while 9457 were recorded in November 2021.
Buyer demand continues to exceed available properties, creating a very competitive market
While real estate sales and listings appear to be returning to pre-pandemic levels, however, the same cannot be said for buyer demand.
The best way to determine buyer demand is to look at how quickly properties are selling and the increase in real estate prices. The greater the demand, the faster the properties sell and at higher prices.
Halifax reported in its February house price index that UK house prices rose 10.8% year-on-year, with Scotland down slightly from the UK trend at 9, 2%. To put this into context, since February 2020 (around the time the effect of the pandemic started to be felt in the UK) the average UK house price has risen by 38,709 £ from £239,414 to £278,123.
ROS said the city of Edinburgh is currently the most expensive part of Scotland to buy a property, with an average selling price of £310,281, the cheapest being East Ayrshire at £122,405.
Properties are also selling faster. ESPC noted that the median time to sell was reduced by 2 days from 20 to 18, comparing the most recent quarter to the same period last year in Edinburgh, Lothians, Fife and the Borders. Some areas show even faster sales time acceleration. For example, homes in West Lothian sold 12 days faster this quarter compared to the same period last year.
As you can see, demand is still very strong in the real estate market, which can be great news for real estate sellers. It can, however, make things difficult and competitive for those looking to buy property.
Evidence suggests that this competitive buyer’s market forces sellers to wait to put their properties on the market until they are sure they will be able to make a subsequent purchase. This then feeds the overall loop of fewer properties on the market, creating higher demand.
Will the war against Ukraine have an impact on the Scottish property market?
Along with the rest of the nation, we have been shocked and upset by the unfolding of the war in Ukraine in recent weeks. Compared to the scale of the human tragedy in Ukraine, it is difficult to contemplate looking more closely at how this conflict may affect our own economy and, consequently, real estate prices. It is nevertheless a concern we have heard from our customers, so it seems only fair that we address these concerns.
We have not seen any impact on demand or interest from people wishing to move, but it is likely that the impact will be felt in a broader perspective over the coming months.
This will likely be tied to the continued acceleration in inflation and the cost of living. Many experts have predicted that it will only get worse, with the war in Ukraine contributing to the acceleration.
As the cost of living rises, wages stay the same and property prices rise. This has the potential to shut many people out of the market, with those most affected likely being first-time buyers. With demand already so high and multiple buyers bidding for most properties, it is unlikely properties will not sell. However, any less competition between buyers is likely to dampen some of the rapid rise in house prices we have seen since the easing of pandemic lockdown rules, when many people found themselves with extra money in their pockets due to reduced ability to spend during lockdown.
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If you are considering buying or selling a property, MOV8 is perfectly placed to help you. Our team of 5-star real estate experts can help you through every step of the ownership process.
If you are considering selling your house or investment property, contact us by calling 0345 646 0208 (Option 1) or emailing [email protected] to arrange a free valuation of your home or to obtain complete and transparent ventilation. cost of selling your home.
If you are looking to buy a property as a home or investment, please call 0345 646 0208 (Option 2) or email [email protected] and we will be happy to help.
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