Housing Shortage as Property Demand Outstrips Supply
Spring is a time when we’d traditionally see the property market pick-up speed. So far in 2016, the number of enquiries from potential property sellers and the number of properties selling has risen sharply from this time in 2015. The time that properties are on the market before selling has also come down significantly.
However, in spite of all of this buying activity, we are not seeing a rise in the number of properties actually coming to the market. In fact, the number of property sales is outstripping the number of new properties that are coming to the market in spite of all of the positive news about selling prices and the speed of sales. So, why is this and why does it mean that it’s a fantastic time for potential sellers to get their properties on the market?
At MOV8 Real Estate, we‘re seeing property sales up by more than 60 per cent from this time last year and our ‘listing’ activity (the number of new properties coming to the market) is up by over 40 per cent. In spite of this, our level of available housing stock levels is sitting about 50 per cent lower than it was this time last year.
If the quantity of properties selling continues to outstrip the supply of new properties coming to the market, there is a danger that it will drive prices sharply upwards, making it even harder for property buyers to be able to afford their new home. The problem seems to be stemming, at the moment, from property sellers being reluctant to put their own properties on the market because they worry that they will struggle to find a property that they want to buy. This of course creates a cycle that could, in turn, artificially inflate the prices of properties that are currently on the market.
If potential property sellers wait until they have found their ideal new house before putting their own property on the market, the whole market grinds to a halt: after all, the shortage of good properties for sale is a direct result of the reluctance of those potential sellers to put their properties on the market.
If the supply of properties coming to them market rises, this should help to stabilise house prices for the longer term. However, if you are a potential seller, the lack of properties for sale at the beginning of 2016 is leading to the majority of sales being for a price that is equal to, or in excess of, the Home Report valuation.
With a shortage of properties on the market meaning that selling prices are going up and selling times are coming down, there has not been a better time in the past few years to get your property onto the market if you are thinking of moving home. We would encourage anyone who is thinking of selling their property this year to take advantage of the current market conditions and to get their property onto the market as soon as possible.
If you are considering selling a property or you would like more information about the property buying or selling process in Scotland, please don’t hesitate to get in touch with our knowledgeable and friendly property experts for more information today. Just call us on 0345 646 0208 or email [email protected] for more information!