David Alexander

The property firm found that the number of properties advertised for sale in the period between October 2022 and October 2023 has increased by 47% in Edinburgh; is up 43% in Inverness; 41% higher in Dundee; increased 12% in Glasgow; 6% up in Perth; and 3% down in Aberdeen.

This is the highest number of properties for sale in Edinburgh since July 2015 when 2.419 homes were for sale compared to 2,368 in October 2023. There was also a peak in November 2020 when 2,357 properties were advertised in Edinburgh.

The trend is less defined elsewhere with Glasgow, Dundee, Aberdeen, and other cities all having more recent peaks in volumes.

The greatest increase in the central belt is in the number of detached and semi-detached homes for sale. In Edinburgh, the number of detached and semi-detached homes advertised for sale were 114% and 61% higher and in Glasgow they were up 26% and 16% respectively. The picture across Scotland’s other cities was more evenly spread across different property types although Dundee had an increase of 80% and 59% respectively in the number of detached and semi-detached homes for sale.

David Alexander, chief executive of DJ Alexander Ltd, said: “With interest rates increasing 14 times since December 2021 you might expect there to be a decline in activity in the property market. Given that prices in the Scottish housing market have remained quite robust over the last year or so for volumes to be rising to such a degree is surprising.

“Of course, this could be a sign of a slowing market with more properties sticking or it could be distressed sellers desperate to sell as affordability issues arise from growing mortgage costs.

“You might, therefore, assume that increased volumes would lead to falling prices. The greater the supply the less demand but I am not sure the relationship is not quite so linear.”

“Looking back on previous periods when the volume of properties was high there was only a slight correlation between high volumes and lower prices. For example, in July 2015 when volumes were slightly higher than October 2023 prices did dip but were still up 3.2% 12 months later. In November 2020 when volumes were only marginally lower than the latest month average house prices barely dipped at all and were 10.7% higher the year after.”

Mr Alexander concluded: “There is, therefore, a very mixed picture. While higher volumes should lead to a softening of prices there are parts of the market – detached and semi-detached homes – which seem unaffected by rising interest rates and greater availability. This cannot last forever but it is clear that we have in Scotland a market that seems remarkably resilient, less susceptible to interest rate rises, and able to support higher prices despite greater supply.

“While this is clearly incongruous and unsustainable in the long term it shows that pent-up demand, coupled with parts of the country attracting buyers from across the UK and internationally is creating a unique marketplace which, for the moment, seems protected from some of the more damaging price fluctuations being experienced elsewhere in the UK.”