Scottish house sellers are gradually and increasingly being forced to lower their asking prices as buyers simply refuse to pay for their optimism.
According to the latest release of the s1homes Scottish House Price report buyers paid on average £9000 less than sellers were asking during the three months to September. While this was a smaller gap than the £19,000 recorded for the previous quarter, it shows that the trend is continuing.
It shows that the Scottish property market is currently a buyer's market. We saw the same in the rest of the UK during 2008, when sellers were still totally unrealistic as to the depths of the crash, and buyers, holding all the cards were gradually pulling down asking prices. During this time the Scottish market was performing better, but as we have seen with many other locations that avoided the initial crash, the prolonged economic uncertainty is now dragging them into it. With buyers now taking charge in Scotland we can expect to see asking prices being gradually pulled down.
In fact, according to the data this has already started to happen. S1 homes recorded a slight fall in asking prices for the third quarter, which, because of the smaller gap between asking and sale prices represented a growth in sale prices for the quarter.
Experts said the trend suggested sellers were becoming more realistic about what their homes would actually sell for, although some are still being disappointed.
Ross Harper, of Glasgow Property Agency, cautioned that the figures may have been distorted by a swell in the number of cheaper properties being put on the market.
He said: "We've noticed that lending criteria and deposits are pushing first-time buyers more towards rental and this means that average selling prices are rising due to falling numbers of transactions at the lower levels.
"As we move towards winter, things will become even more price sensitive."
Mark Smith, managing director of s1homes, said: "While it's true that house-sellers seem to be being more realistic, it's still the case that despite the well-publicised market conditions, house sellers remain by and large overly optimistic as to the prices they can achieve and are often having to accept substantially less than they had hoped for."
- Friday 02 December 2011