Appetite for buying and selling homes still strong - David Alexander

People might have assumed that as the impact of interest rate rises filtered through to the housing market there would be both a fall in average prices and a reduction in the volume of properties advertised for sale. While there has recently been a very minor drop in average prices in Scotland, our latest research shows that the number of properties on the market is increasing year-on-year and the appetite to buy and sell homes remains very strong.

The rise in the volume of properties advertised for sale varies from area to area but across all of our cities – with the exception of Aberdeen where there has been a very slight fall – the increases have ranged from 17 per cent in Glasgow to 83 per cent in Inverness in the period between August 2022 and August 2023.

The number of properties for sale was up 81 per cent in Dundee; 45 per cent higher in Edinburgh; 22 per cent greater in Perth; and five per cent down in Aberdeen. This shows a remarkably positive performance across much of the country despite gloomy predictions of sales volumes falling and prices dropping.

Despite an interest rate policy which is specifically designed to slow down inflation by reducing demand in sectors like housing we are still seeing an overwhelming desire on the part of Scottish homeowners to keep on buying and selling.

David Alexander is chief executive of DJ Alexander Scotland (Picture: Laurence Winram [email protected])

To put these numbers into context, the August 2023 figure is in the top four by volume of any of the last 30 months. Not only is the volume of sales still increasing it is at a near three-year high.

Of course, there could be multiple reasons for this which might include people selling now because they don’t think they will be able to afford to pay a higher mortgage rate; they are getting out now before they believe prices will fall; or the more prosaic notion that people still want to move because life goes on regardless of inflation.

But perhaps a further indication of the strength of the market is not just in the geographic trends but also in the property types that are doing well. We have seen an extraordinary growth in demand in the central belt for detached and semi-detached homes.

In Edinburgh, for example, the volume of detached and semi-detached homes advertised for sale was 99 per cent and 116 per cent higher year-on-year and in Glasgow they were up 74 per cent and 34 per cent respectively. The picture across Scotland’s other cities was more evenly spread in different property types although Dundee had an increase of 128 per cent in detached homes for sale. Alongside this increased volume the average prices of these larger homes seem immune to market pressures and are continuing to increase.

​Scotland’s housing market remains extremely resilient (Picture: Aldeca Productions - stock.adobe)

However, there is little doubt that prices are softening in the wider market compared to the large increases experienced over the last three and a half years but there is no sign of any major correction.

With the number of properties advertised for sale remaining so positive it is a testament to the faith of homebuyers in Scotland who clearly believe that any downturn in the market will be temporary and is not acting as a hindrance to their purchasing intentions.

There will undoubtedly be a calmer period in the housing market at some point but with strong employment levels, very high wage rises currently filtering through the economy, and an underlying belief in the strength of the housing market it seems unlikely that Scotland will experience any kind of substantial price fall in the next year or so. It would seem as if some of the price corrections currently being felt in parts of England may bypass Scotland altogether.

As ever with housing predictions we shall have to wait and see but the last year and a half has shown little sign of any major jitters in a market that seems remarkably resilient.

David Alexander is chief executive of DJ Alexander Scotland