Our residential property team recorded a 2.8% rise in Edinburgh sale prices during 2022 as the market resets despite ongoing economic uncertainty.
There has been a rise in the average price of the properties sold by our estate agency team amid hopes that a more stable market in 2023 could be more productive for buyers and sellers.
Throughout 2022, the average price of homes sold through our Edinburgh office was £325,000. That compares to £316,000 in 2021 - a rise of 2.8%. Those sales were largely in and around the city, but also cover the wider Lothian regions.
In Dundee, our team recorded an average property sale price of £204,000 during 2022; that’s up 13% from £180,000 in 2021, and the first time Dundee’s average price has exceeded £200,000.
Predictions of price collapses have not materialised, despite political and social turmoil, the cost of living crisis and the interest rate spike triggered by Kwasi Kwarteng’s mini-budget in September saw the market shift from being heavily weighted towards sellers, to being more balanced. Offers are now more commonly closer to the home report valuation.
Andrew Diamond, Partner and our Head of Residential Property, said: “We’re not seeing any lack of appetite among buyers and sellers. What we are experiencing, though, is a resetting of the market.
“Predictions of doom and gloom have not materialised and the market has settled down, as we expected it would. The outlook may, to some, have seemed dreadful in the very short term, but has improved as time has moved on. Interest rates have already started to settle. Mortgage rates are dropping slightly.
"What we might see in early 2023 is a much more stable, tradeable market, with prices at a slightly less frothy level but with a greater ability for buyers and sellers to actually trade - to get things done.
“Ultimately, it’s important to remember that a balanced market is a good market, particularly if you are both a buyer and a seller.”
One change coming through strongly is a decline in the number of purchases being agreed subject to sale of the purchaser’s current property, a trend which had become stronger as prices skyrocketed in recent years. This means more people are selling their homes before agreeing deals to buy another.
Andrew added: “Will we see some heat come out of the market? If you mean some of the extreme high prices we’ve seen in recent years, then absolutely. That’s not a bad thing in most peoples’ eyes. If what you end up with is a more tradeable position, that’s good.
“There’s definitely a move to being a bit more traditional about the ordering of your sale and purchase. I don’t see that reversing in the short-term.”
Registers of Scotland figures show the average price of a property in Scotland in October - the most recent month analysed - was £194,874, an increase of 8.5% on October 2021. Prices rose by 1.1% between September and October. The UK average house price was £296,422, an increase of 12.6% on October last year.