Housing slowdown

Home prices to flatten as demand eases

housing for sale
Home sales are easing (pic: Terry Murden)

Demand among home buyers in Scotland is showing signs of easing, while rising prices caused by a lack of supply are also expected to flatten.

New buyer enquiries fell In July for the third consecutive month, according to the latest Royal Institution of Chartered Surveyors (RICS) Residential Market Survey.

At the same time, there was a fall in instructions to sell, meaning stock on the market is limited. This limited stock and easing in demand, has led to a fall in sales.

However, more respondents reported that prices rose over the past 12 months, though they are expecting prices to flatten over the next quarter.

Tarrant Parsons, senior economist for RICS, said: “Amid a backdrop of sharply rising living costs, slowing economic growth and higher interest rates, it is little surprise that housing market activity is now losing some momentum.

“With monetary policy set to be tightened further over the coming months, sales expectations point to a further softening in transaction volumes going forward.

“Nevertheless, with respect to house prices, limited supply available is still seen as a crucial factor underpinning the market. Although house price growth is likely to continue to ease, respondents still anticipate prices will be modestly higher than current levels in a year’s time.”

Jennifer Campbell from DM Hall, added: “A shortage of sales stock available on the open market continues to drive competitive closing dates with prices offered up to 20% over market value.

“It is anticipated that the second energy price hike will likely affect affordability and prices will come back down.”

Leave a Reply

Your email address will not be published. Required fields are marked as *

This site uses Akismet to reduce spam. Learn how your comment data is processed.