The Glasgow residential property market remains strong
Last updated: 9.56pm, Monday 29th June 2020
We look at the reasons, trends and fundamentals of the Glasgow property market.
By Gordon Campbell
29th June 2020
Scottish and Glasgow residential house prices are not dropping, despite what you may be reading or hearing elsewhere.
That is also confirmed by Eric Curran, managing partner at DM Hall chartered surveyors, one of the biggest and most respected in the country.
The last thing anybody needs at the moment is someone else banging on about fake news but if you did listen to the mainstream media or the social media so called experts, you would be getting very frustratedto say the least!
A combination of instinctive sensationalism, clickbait headline generation and what appears to be a fundamental lack of knowledge about how markets work has produced a stream of stories of late which suggest that the housing market is doomed and prices are falling through the floor.
This is quite simply nonsense and not supported by housing market stakeholders sentiment.
When the current crisis began to develop in March this year, we had updated on our regular blogs with What Might COVID-19 Mean for the Housing Market and specifically in Glasgow.
It was said that the mechanics of the Scottish residential market and its underlying strengths were not altered, there was no reason for it not to carry on as usual when the upturn comes.
As it has.
As it will continue to.
Has Glasgow a Different Market to the Rest of Scotland and the UK?
Yes. It does
Part of that is about looking at all of the markets and seeing the differences.
There has never been a UK market.
There are UK markets.
A lot of people talk about "The property market" as if the UK was one market.
It is not.
There are at least 6 major UK markets The South of England, The North of England, Northern Ireland, Scotland, Wales and of course the London market.
If We look at prices in some parts of the UK we are still seeing price stability, especially like Glasgow.
This is because the market prices are based on real reasons for price stability.
Each of these markets are likely to be impacted differently, and to different degrees by the fallout from the coronavirus.
Glasgow’s underlying economy is one of the most diverse and strongest in the UK.
Many of the articles and much of the research on the residential property market, and their projections are based on The South of England and the London market.
Because that is seen to represent the UK market. And it isn’t.
UK and Glasgow housing rebound still retains its momentum:
- Sales agreed at pre Covid levels as is flow of new stock.
- Demand has drifted lower 11% over last 2 weeks off a high base and still 40% over early March 2020.
Year on year, the House Price Index expected to hold at +2 to 3% for next quarter.
One of the main reasons that I remain firmly optimistic is that strong anecdotal evidence from agents tells of hundreds of viewers waiting for the opportunity to see homes and even of bids being made on the strength of virtual viewings.
There is no doubt that there is still a powerful pent-up demand to see houses, allied to a continuing lack of supply.
So, stories of the inevitability of dramatic house price falls simply do not compute. They defy the basic laws of economics!
That is not to say that variables will not come into play as the year progresses. The Coronavirus Job Retention Scheme presently is masking the possibility of substantial redundancies which, if significant enough, could have the effect of dampening demand.
But here is another anomaly.
Consider the huge numbers of individuals who have been furloughed or are working from home.
They are not spending money on travelling to work, or coffees, snacks and lunches; they may have taken mortgage and insurance payment holidays; they are not going to the pub, cinemas, theatres or football; they certainly are not going on holiday.
As a consequence, they are better off in cash terms than they have been for some time.
The property market is much closer to a V-shaped recovery than I thought even in March. So, I say to people thinking of selling or buying a house: don’t listen to the doomsayers.
What does history tell us about house prices in Glasgow?
Here is a chart of house prices in Glasgow since 1970 that highlights the continued strong growth despite any economic interruptions.
Why is that?
Simple. It is supply and demand.
Demand outstrips supply. It always has and always will.
But has to be the right property, in the right location, at the right price at the right time.
That is what Alliance and our market in Glasgow offers.
Off Market, Below Market Value, Strong Yields, Strong Cash Flow and Areas of Demand.
House prices in Glasgow since 1970
The Glasgow market is in good shape and ready to go.
Property investment is about time in the market, rather than timing the market.
Property is a long-term investment.
Alliance Property Group offers a unique service of Off Market properties in a good location, at a great below market value price, in good condition and an area where there will continue to be demand for your properties, regardless of the economic cycle.
We share our 35 years’ experience as proven and successful Buy to Let investors and landlords, knowledge and partnering teams and help you create wealth and income.
In the words of Warren Buffett;
‘be fearful when others are greedy and be greedy only when others are fearful’.