We have passed the halfway point of 2018 and we may finally be seeing signs that the red hot property market in Edinburgh and the Lothians is starting to cool off a little.
For almost 18 months market conditions have heavily favoured sellers. There has been a shortage of properties available for sale meaning that there has been an excess of demand relative to supply. As a result, properties have generally been selling quickly and achieving offers well in excess of Home Report valuation.
During June however, we saw some tentative signs that demand from buyers may be starting to ease off a little. Properties coming onto the market in June, while still attracting a strong level of interest, were not quite as inundated with enquiries as was the case earlier in the year.
More tangibly, when we examine the premiums that properties are achieving relative to their Home Report valuation we can see that these are lower than the premiums that were being achieved earlier in 2018. During the first two months of 2018 properties sold in Edinburgh and the Lothians were achieving an average of 7.4% over and above their Home Report valuation. In June, this figure had fallen to 6.3%.
Commenting on the latest figures David Marshall, Operations Director with Warners said:"Early in the year there was a huge excess of demand over supply with buyer activity high but the number of properties coming onto the market very low. More recently however we have seen a modest upturn in the number of homes coming up for sale. At the same time buyer activity has eased a little which has meant the market has been a little more balanced.
"House prices are also rising quickly. Most recent figures from ESPC showed that the average house price in Edinburgh rose by 5.1% annually in the three months to June. That’s down from around 9% earlier in the year, but still well above the rate of wage growth or CPI inflation.
"The message is therefore that it remains very much a seller’s market, but that conditions have at least become a little less challenging for property buyers over the last few weeks.
"As we move into the second half of the year we would expect to see the number of homes coming onto the market improve further as more sellers are tempted back by the rising house prices we have been seeing. That improvement in supply should help to further improve the balance in the property market"
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