Rising Prices Signal Scotland’s Housing Market Recovery

on Aug 12, 2013
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iNVEZZ.com Monday, August 12th: The flagging Scottish housing market is showing signs of recovery with both selling and asking prices increasing for the first time in 12 months, new market data has shown.

According to the latest quarterly house price report from the Scottish property website s1homes.com, the second quarter of the year saw a three-percent rise in selling prices and nearly two percent higher asking prices, as compared to the preceding three-month period.
Mark Smith, managing director of s1homes, commented on the findings: “What this quarter’s report shows is that there are signs there’s a bit more confidence in the overall market, which is leading to prices starting to creep back up.”

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The data was generated by comparing the asking prices of 30,000 Scottish properties for sale on the s1homes website with the actual prices achieved, as recorded by the Registers of Scotland. Thus the average asking price with the property website was £14,590, and the average settlement price, according to the official government agency, was £153,102, showing that there was still a “reality gap” between Scotland’s asking and selling home prices.

**“Reality Gap” in Scotland House Prices**
The statistics showed that on average, homes in Scotland were sold for nine percent less than they were advertised for. This marks a decrease from the 10-percent gap recorded in the first quarter of the year. The difference between the seller’s expectations and the figure properties sell for was branded the “reality gap” by s1homes.

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According to the property website, the biggest reality gap was for owners of detached houses who were selling 18 percent on average below their asking price. By contrast, flats and terraced houses were faring better with the average selling prices for both remaining higher than the asking prices. Regionally, Stirling and Clackmannanshire saw the largest increase in the reality gap with properties there selling for 23 percent below asking prices, according to the s1homes estimates.

**Property Market Recovery Picks Up Pace amid Upbeat Economic Data**
s1homes’s figures were announced after a separate study recorded a near-record rise in demand for manufactured goods and services in Scotland, which is expected to create a rise in jobs.
According to the Bank of Scotland Purchasing Managers’ Index survey, the service sector recorded its fastest rise in demand in 15 years last month, while the rise in new orders from manufacturers was close to its fastest rate since the bank launched its survey in 1998.

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