- Overall Reality Gap in Scotland is just over 2%
- The average asking price fell this quarter for all property types
- Average selling prices fell by about £6,500 for flats, almost £5,000 for terraced houses and over £6,000 for semi-detached properties
- Buyers are prepared to pay more for detached houses although these continue to be unrealistically priced selling for around £34,000 less than their asking price
Our latest quarterly house price report reveals that despite changes in asking and selling prices there has been little change in the ‘Reality Gap’ (the difference between what sellers hope to sell their properties for and the price they actually achieve).
Between October and December, the Reality Gap narrowed slightly remaining at just over 2%. On average, properties are selling for around £3,000 less than their asking price although this masks the real picture of the property market as this figure is strongly driven by sales of detached properties.
The average selling price fell by about £6,500 for flats, almost £5,000 for terraced houses and over £6,000 for semi-detached properties. In contrast, the average selling price of detached houses continues to increase as buyers are prepared to pay more.
However detached houses are still being unrealistically priced, typically buyers are securing sales for 13% (£34,000) less than the asking price while semi-detached houses are now generally selling for spot on their asking price a consequence of falling selling prices. Both flats and terraced houses continue to sell significantly above their asking prices, although falling selling prices have meant that the difference between asking prices and selling prices has reduced.
The average asking price of all property types fell last quarter, with the most sizeable drop being for flats. Flats last quarter were typically advertised at 3% less than they were during the previous quarter.
Ewan Stark, Managing Director of s1homes said: “Schemes such as the Government’s Help to Buy alongside growing confidence in the market have reignited demand for property in Scotland. Sellers are pricing properties more competitively in order to secure sales and buyers at the lower end of the market are managing to purchase property for less than they were last quarter.”
Commenting on the report, Eric Curran, Managing Partner of DM Hall said: “It is interesting that agents/sellers are adjusting asking prices to be more competitive in the quietest quarter of the year. DM Hall is finding that properties marketed at the correct asking price and with the correct Home Report valuation are selling within a reasonable period at or close to the Home Report value.”
Jamie Lonsdale, Managing Director of Jamie Lonsdale Estate Agents comments on seller’s expectations: “We have seen more confidence from buyers over the last quarter. Most property is selling over the asking price but still selling below Home Report value. Sellers need to be able to justify and be realistic about their asking price and expectation.”
Regionally the Reality Gap varies, the biggest gap was in Ayrshire where properties are on average selling for 18% (£27,000) below their asking price. Edinburgh is the only region where the average property sells for more than the asking price with sellers achieving 1.3% (£3,000) more. The Reality Gap in Glasgow/Dunbartonshire narrowed to 6% (£9,000) last quarter.
The House Price Report, published quarterly, samples around 25,000 properties advertised on s1homes.com every month and provides trends in the various property markets throughout Scotland.