Down by half! Properties advertised for sale in Scotland falls dramatically

A leading firm has claimed that the number of properties advertised for sale in Scotland has almost halved over the last two years.

DJ Alexander Ltd, one of the largest estate and letting agents north of the border, revealed that the volume of properties advertised for sale in Scotland’s cities has declined between 16% and 52% since the recent peak in the autumn of 2020.

The largest fall has been witnessed in Dundee, with 52% fewer properties advertised in August 2022 compared to November 2020. Aberdeen had the lowest drop over the same period, but still saw supply decrease by 16%.

“It is clear that the market is running out of steam although, ironically, this significant reduction in volumes could temporarily maintain prices for a few more months as more buyers seek fewer properties,” David Alexander, chief executive of DJ Alexander, said.

“The peak in volumes in the autumn of 2020 was really quite marked and seems to have been a reaction to the initial lockdown driven by working from home, historically low interest rates, and a desire to find the ideal property.”

He said this level of volumes hadn’t been seen on the market since July 2016 and the fact that this has been matched by record price rises shows how much demand has been exceeding supply over the last two years.

“However, it is clear that we are now facing a downturn in the market and prices are likely to fall in the coming months. Not substantially but certainly we will not be experiencing anything like the lift in prices that we have witnessed over the last two years,” Alexander continued.

“This is a good thing as markets cannot sustain long-term continuous rises without the possibility of a future crash. With the financially depressing pressures of the cost-of-living crisis, rocketing fuel prices, utility increases, and the potential for the economy to slip into recession, it is impossible for this not to have an impact on the housing market.”

He said prices are already stabilising and falling back slightly. Although the fall in volumes may aid further sales in the short-term, he believes the medium to long-term trajectory is almost certainly downward.

“How far prices slip is unknown, but I would expect a dip in the next month or so followed by a year or so of stability until the outlook for the economy becomes clearer,” he concluded.