ESPC House Price Report - June 2011
- Over the last three months house prices in most areas of East Central Scotland showed year-on-year falls of between 3 and 10%.
- In Edinburgh the average house price in the three months to June was £219,530 - down 3.6% annually.
- The average price of a one-bedroom flat in Leith Walk and Easter Road fell below £100,000 for the first time since 2006.
- The supply of properties for sale still exceeds the level of demand meaning that the balance of power in the market continues to favour buyers.
- 70% of properties sold at Fixed Price over the last three months were secured for less than the asking price, up from 53% during the same period last year.
- The expectation is for average house prices to show annual falls of between 3 and 5% in coming months.
The average price of a property sold in Edinburgh between April and June stood at £219,530 this year compared to £227,760 last year - an annual fall of 3.6%. The fall this year came on the back of a 9.6% annual rise in 2010 meaning that the average house price was still 5.6% higher than that recorded in 2009.
David Marshall explained: "At this stage last year we saw prices rise sharply and in most cases the falls we are seeing now are simply offsetting those increases. In Marchmont and Bruntsfield for example the average price of a two-bedroom flat fell by 13.1% annually this year but this came on the back of a 14.7% rise last year. As a result, the new average of £252,197 seen this year is almost unchanged compared to two years ago when the average stood at £252,991.
"Similarly a 6.2% year-on-year drop in the City Centre this year followed a 13.2% increase in 2010. The current average of £235,266 is thus a little over 6% higher than that recorded two years ago.
"There is a notable exception to this trend when looking at the market for one-bedroom flats in areas like Dalry and Leith. Typically smaller properties in these areas were particularly popular with first time buyers and buy-to-let investors, two groups where demand has been most impacted by the credit crunch. Consequently the average price of a one-bedroom flat in Dalry and Gorgie and in Leith Walk and Easter Road now stands at less than £100,000 having stood at over £125,000 at the peak of the market.
"On one hand this will be bad news for those who bought smaller properties in these areas at the peak of the market, particularly those who did so at higher loan-to-value ratios. On the other hand it will be more welcome news for first time buyers, many of whom have been priced out of the market due to a combination of high prices and low mortgage availability."
West Lothian and Midlothian both recorded a year-on-year decline in the average house price in the three months to June. In Midlothian a 10.8% fall took the average house price to £161,350, whilst in West Lothian a drop of 9.5% brought the average selling price of a property in the area to £151,714.
In both cases the decline observed this year followed a sharp rise the previous year. The 10.8% drop in Midlothian followed a 15.4% rise in 2010 and in West Lothian this year's 9.5% decrease came on the back of a 20.6% rise last year.
David Marshall explained: "At this stage last year we saw prices rise very sharply in Midlothian and West Lothian, so the falls we're now seeing have gone some way to offset that. East Lothian has somewhat bucked the trend having recorded an annual rise in each of the last two years, however across the board we expect to see prices edge back downwards in coming months."
The average selling price of a property in Dunfermline between April and June this year was £127,025. This represents a fall of 10.2% compared to the same period in 2010 when the average property price in the town stood at £141,402.
David Marshall commented: "The number of homes selling is still relatively low with sales volumes currently around 50% below pre-credit crunch levels. As a result the average house price within towns such as Dunfermline is relatively volatile. Overall though we expect the general trend in the town in months ahead to be in line with those seen across the rest of East Central Scotland with prices edging down from the high levels recorded last year."
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