After a whirlwind 18 months there are finally signs that the property market in Edinburgh and the Lothians has started to settle down. During the last quarter of 2017 market conditions were still favourable for sellers but there was a better balance between supply and demand, meaning that some of the high premiums being paid to secure properties earlier in the year have been less prevalent.
In Q4 2017, properties sold by Warners achieved an average selling price that was 5.4% over their Home Report valuation. This marked a reduction from 6.0% in the previous three months and was the lowest figure for any quarter in 2017.
The rapid selling times that we saw during the first half of 2017 have also cooled a little. During the last three months of 2017 the median selling time for a property sold through Warners was 20 days, up from 17 days in the previous three months and from just 14 days at the start of 2017.
The cooling in the market can partly be attributed to seasonal factors. More importantly though, there has been a rise in the number of properties coming onto the market. During the last three months of 2017 Warners recorded a 13% annual rise in the number of properties being brought to the market for sale.
The increase in new listings is significant because the main factor driving the seller’s market over the last two years has been a lack of supply. During that period demand from buyers has consistently outstripped the supply of homes for sale. As a result, the homes that were available for sale generally attracted a large number of buyers, resulting in the low selling times and high premiums that characterised the market.
With more homes now coming onto the market, there is greater competition between sellers leading to the cooling in selling times and premiums that we have seen recently.
It is worth putting the recent change in the market in perspective, however. Looking at the bigger picture, selling times are still very quick and the premiums being paid to secure properties are well above levels seen at any time over the last decade, prior to 2017. For a large majority of sellers, the market therefore continues to be favourable.
That said, the local property market is likely to be somewhat cooler in 2018 than was the case last year. The buoyancy of the market over the last two years will cause sellers who had been delaying putting their property on the market to take the plunge, further improving the balance between supply and demand. At this stage we expect annual house price inflation to stand at around 2.5% in the local market over the course of the year, having been as high as 10% during 2017.
If you are thinking of buying or selling a property feel free to give us a call on 0131 667 0232 or by emailing email@example.com and one of our friendly, expert team will be delighted to help.