Prices moderate in Edinburgh but it is still one of top cities in Europe for growth
Price growth in Edinburgh’s prime property market moderated in the first quarter of 2019, up 0.6% with political uncertainty possibly affecting the city’s real estate sector.
However, prices in the prime property sector in Scotland’s capital city are still up 7.6% on an annual basis, down from 10.6% at the end of 2018, meaning it is still one of the fastest growing cities in Europe, according to the latest index from Knight Frank.
Demand continues to outstrip supply in Edinburgh and this has led to rising demand for family homes which have increased in price by 9.2% year on year while the price of flats are up 5.1% year on year.
An ongoing supply and demand imbalance is expected to underpin values in 2019 even although a lack of clarity surrounding Brexit has increased caution among some buyers and sellers of residential property.
‘Most notable has been a slowing in activity among more discretionary purchasers, including landlords and second home buyers, as they wait for more clarity as to what the impact of Brexit will be on the economy,’ said Oliver Knight, associate at Knight Frank residential research.
‘That said, properties that are priced to reflect current market conditions continue to attract buyers. In particular, demand for family houses outside of the city centre has been robust, especially in areas such as Murrayfield, Morningside and Newington,’ he pointed out.
He also pointed out that the number of listings in Edinburgh was 5% lower in the first three months of the year compared to the same period in 2018 and the figure was 22% lower than in the first quarter of 2017.
This decline is steeper for properties valued at more than £500,000. There was a 22% drop in new listings between £500,000 and £1 million and a 7.4% fall for homes valued at £1 million and above in the first quarter.
As a result of this decline, the ratio of new applicants to new instructions for homes priced at more than £1 million rose to its highest level since 2015, Knight Frank figures show. ‘This should continue to put a floor under pricing. We expect this supply and demand imbalance to underpin values in 2019, which should help offset the impact of any political and economic uncertainty to some extent,’ added Knight.