Leading Scottish Estate Agent, David Alexander, sums up the market in The Scotsman.
The housing market in Edinburgh is defying expectations and remaining resilient, despite fluctuations seen in other parts of Scotland and the rest of the UK. The recent sale of two houses in Moray Place for a staggering £4.8m and £4.9m highlights the buoyancy of the Edinburgh housing market. These prices, which may have shocked buyers just a couple of years ago, are becoming more common in the city.
The article explores why certain types of properties, such as detached homes and newbuilds, along with specific geographical areas in and around Edinburgh, are safeguarding house prices. It also discusses the potential consequences of this market resilience and what it means for potential investors.
Contrasting Performance
According to his analysis of the latest official figures, there is a stark contrast in the performance of different types of homes and specific locations. Detached homes, in particular, continue to experience average price increases despite significant gains in the past three years. While the average house prices in Scotland have fallen slightly by 1.19% between July 2022 and June 2023, detached homes have seen a rise of 0.42% across the country. Notably, Aberdeen prices have experienced a decline of 3.04%, while Edinburgh and Glasgow have seen increases of 2.72% and 1.33%, respectively.
The most remarkable increase, however, can be observed in the average price of newbuild homes. These properties have seen a dramatic rise of 14.99% in Scotland between May 2022 and April 2023. Edinburgh had the highest price increase at 16.74%, followed by Glasgow at 12.64%, Dundee at 9.75%, and Aberdeen at 4.66%. This surge in newbuild prices is in stark contrast to the wider market, which is either slowing down or witnessing price falls.
One possible reason for this trend is the fixed price of newbuilds, eliminating the need for buyers to engage in bidding wars. Additionally, the appeal of purchasing a home that requires no additional work is attracting buyers to invest in newbuild properties.
Moreover, there is a growing divide between Edinburgh and its surrounding areas in terms of price performance. While much of the rest of Scotland is experiencing stability or even a decline in average house prices, Edinburgh and its neighboring regions are consistently showing price increases.
East Lothian has seen a remarkable rise of 14.7% in prices over the past year, Fife has experienced a 2.9% increase, and West Lothian has seen a 1.4% rise. This geographic divide emphasizes the attractiveness of Edinburgh and its surrounding areas to prospective buyers not only from Scotland but also from the rest of the UK and internationally. The city’s reputation, lifestyle options, cultural offerings, and accessible green spaces make it an enticing destination for homeowners worldwide.
The demand for premium homes in Edinburgh continues to outstrip supply, despite recent interest rate rises having little impact on buyers in the capital. Stockbridge and the New Town remain fashionable areas, attracting enthusiastic buyers who are willing to pay a premium for larger properties. As demand continues to exceed supply, the Edinburgh property market remains vibrant and dynamic.
Conclusion
Edinburgh’s property market is defying expectations, with certain types of properties, such as detached homes and newbuilds, and specific geographical areas surrounding the city maintaining average house prices despite fluctuations seen elsewhere. The fixed price and no additional work required for newbuilds make them particularly attractive to buyers.
However, the continued growth of Edinburgh’s property market may gradually make it unaffordable for those outside the city and its surrounding areas. It remains to be seen how the market will evolve in the coming months, but for now, Edinburgh remains a haven for property investment, driven by demand that exceeds supply. Potential investors should consider the city’s unique offerings and long-term growth potential when making their investment decisions.