Reality gap for property sales widens

Reporter

Monday 13 August 2012

SCOTLAND's plushest homes are selling at one-fifth below their asking prices.

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David Leask and Christine Lavelle

A new study last night revealed the "reality gap" – the gulf between what vendors expect and what they get – is now averaging £55,000 for detached properties.

In a clear sign of continuing uncertainty in the market, website s1homes yesterday revealed selling prices were falling under asking prices for every category of housing.

The average Scottish house sold for £153,301 in the second quarter of this year, fully £15,500 less than the average price at which homes were advertised. Mark Smith, managing director of s1homes, said: "The report shows house sellers are still being unrealistic with their expectations and setting their asking prices too high. Even with the slight increase in selling prices achieved, the gap between expectation and reality is still very marked, particularly at the higher end of the market."The website, owned by the publishers of The Herald, measured the reality gap by comparing asking prices in thousands of its own adverts with official house price averages produced by government agency Registers of Scotland.Figures clearly show vendor expectations become increasingly unrealistic the higher they are on the market scale. The average detached home in the second quarter was advertised at just over £280,000, up nearly 3%. But the average selling price was just under £225,000, a "reality gap" of nearly 20% or £55,000.Semi-detached houses sold for an average of about £8000 less than the price at which they went on to the market.Advertised prices were far more realistic at the bottom end of the market, s1 Homes found. The average asking price for a flat in April-June 2012 was £113,444, but the average selling price was £117,435 – more than sellers were expecting.Moya McVey from the Glasgow Property Agency suggested the slow market for detached homes meant sellers did not know at what price to pitch their properties. She said: "It would appear that agents have had to deliver an honest pricing strategy at lower levels in the market in order to sell, and evidence can be shown due to the volume of transactions."In the higher price brackets, the volume of transactions has dipped and consequently there is less evidence to point sellers in the right direction."Meanwhile, the "reality gap" varied dramatically across Scotland. It disappeared altogether in Edinburgh, where the average asking price of £214,559 was well below the average selling price of £220,428.However, it widened in Glasgow/Dunbartonshire. Here the average price rose, to £136,298, but not as quickly as the average asking price, which was £151,823.

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Reality gap for property sales widens

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