Property prices in Scotland’s prestigious prime market fall despite rally earlier this year

Prime real estate prices in Scotland’s capital city dropped 4.6% in the third quarter of the year following an upturn in the first six months of 2010, according to the Knight Frank Prime Edinburgh Residential Index.
 
The New Town/West End area proved most resilient, with the biggest falls seen out with the city centre. Property values above £2 million have fallen more than those in lower price bands, making now a good time to upsize, the report says.
 
Sensible pricing attracts more viewings, leads to more offers and means guide prices are more likely to be met or even exceeded. As a result half of Knight Frank’s prime Edinburgh house sales this year achieved more than the asking price.
 
Overall prices in this sector have fallen by 4.7% in the past year. ‘The figures support the advice that we have been giving vendors for months that realistic pricing is essential to attract viewings. Buyers have become increasingly price sensitive and they simply will not view properties they consider to be over-priced,’ said Matthew Munro, head of Edinburgh city sales at Knight Frank.
 
‘Where properties have been on the market for some time with little interest, vendors would be wise to consider reducing the asking price to trigger viewings. When clients have done this, the impact on enquiries has been significant. Offers made are then more likely to meet, and even exceed, the asking price,’ he explained.
 
The agents take an average of six weeks to sell property in Edinburgh from the day it goes on the market to the day an exchange is agreed. It recently sold three properties within four weeks.
 
Munro also points out that the imminent VAT increase in January and stamp duty hike for homes costing £1 million and above to 5% from April 2011 will make buying more expensive for many prospective purchasers next year.