House asking prices 'unrealistic'

Feb 11 2013

Average house prices in Scotland have fallen by over 1% but sellers are still being unrealistic with their asking prices, according to a property firm.

Detached houses are falling well short of their asking price, while flats, terraced and semi-detached house sellers are more realistic, a report by property website s1homes found.

The "reality gap", the difference between what house sellers hope to sell their properties for and the price they actually achieve, is still widening at the upper end with the average selling price of detached houses now at almost 20% below the average asking price.

Flats, semi-detached and terraced houses are attracting offers over the asking price.

The report revealed a marginal widening of the reality gap, with the average asking price across Scotland falling by almost 1.5% to £165,192, in the three months to December.

The average price that properties were actually sold for decreased from £159,310 to £154,810, down almost 3%. This means the average property in Scotland is now selling for around 6% less than the asking price, compared to 5% less in the previous quarter.

Mark Smith, managing director of s1homes, said: "The picture of the market as a whole is still being affected by detached properties being priced at unrealistic levels leading to a significant reality gap. Selling prices are falling in the majority of areas and asking prices aren't being reduced enough to close the gap.

"I think what this shows is the market has been much quicker to adjust at the lower end, while the market at the higher end is particularly entrenched with almost no change at all in the very substantial reality gap over the past 12 months."

With sales volumes down across Scotland, the majority of regions saw little or no change in the reality gap. However, Argyll & Bute and Falkirk both saw decreases in the gap, while East Lothian and South Lanarkshire saw increases.

Edinburgh has once again bucked the trend, along with East Lothian, with the average property being sold for more than the asking price.