Prophets of housing market doom look set to be proved wrong

David Alexander’s latest Column in The Scotsman covers the surprising strength of the property market, and how those who predicted doom and gloom throughout 2023 are being proven wrong:

While many had expected a slowing in the property market the number of homes advertised for sale in Scotland has risen substantially over the last quarter.

Between March and May of this year the volume of advertised properties in Edinburgh, for example, has risen by 21 percent from 1551 to 1871.

In Glasgow the increase has been even greater, rising 23 percent from 1792 to 2202, while in Dundee there has been an 18 percent rise over the same period from 215 to 253. Aberdeen has also had an increase, but of just one percent, reflecting a market where substantial volumes of homes have remained on the market for a longer period.

What does this tell us? Well, it certainly seems to indicate that there is a lot less gloom in the market than many had been predicting. Of course, it could also be because many sellers are expecting price falls and are trying to sell before this occurs but there are other indicators which would defy this view.

However, I believe that it reflects a growing optimism in the property market which belies last year’s negative forecasting. At the end of 2022 and the start of 2023, there was a feeling that a looming recession, high utility bills, double-digit inflation, and slow growth were all signals that the housing market would be negatively impacted by these depressing forecasts.

Instead, we have seen that inflation is forecast to fall rapidly in the coming months, there is not going to be a recession, it has already been announced that utility bills will fall, and, while economic growth isn’t exactly flying, it is improving.

Further signs of optimism in the market are reflected in the relative stability of prices. When more properties are advertised for sale, this usually results in lower prices as supply exceeds demand. However, average prices in the Scottish property market have remained remarkably resilient in the face of recent economic challenges.

You can read his column in full, here.