Property sales soared in the three months from July to September, up by over 22% compared to the same time last year according to the Registers of Scotland.
I can predict, with a reasonable degree of confidence, that subsequent reports will record even sharper sales growth. GSPC members have been reporting sales 30% ahead of the same time last year in the last three months and that will be reflected in Registers of Scotland figures fairly soon.
The report (you can see it here) also says that selling prices are 1.5% above the same level 12 months ago.
Together with much better news on mortgage lending (you can see the latest data on mortgage approvals here), that suggests that the market is starting to improve quite strongly.
But it’s worth putting the news on prices and transactions into context.
Firstly – on prices. If you look at the average selling prices data from the Registers of Scotland since 2010, you will see a regular pattern of prices rising around quarters one and two followed by falls in quarters three and four (see chart). I suspect that this is a seasonal affect. If so, the rise reported yesterday is likely to be reversed, at least in part, over the next two quarters.
If that doesn’t happen and if the Registers report prices rising in subsequent quarters, that could genuinely suggest that prices are indeed rising. One to look out for in the coming months.
Secondly, on transactions. One of the reasons that the growth in sales seems so robust now is that they were so weak this time last year (see table). Sales in September and November last year were even lower than they were in 2011. So, the 22% leap increase in transactions is partly down to some growth in sales, but also partly reflects the fact that we have not seen the slump in sales this year that we saw last year.
Overall, it looks like sales are on target to reach around 80,000 this year – that’s the best figure since 2008, but is still way below the 130,000 transactions seen in 2004.