Property Specialist Rettie forecasts a 1.5% increase in average house prices and over 4% growth in sales transactions for 2024.
This outlook is set against a backdrop of a market adjusting to higher interest rates and a near 10% anticipated drop in transactions compared to 2022.
The rental sector in Scotland is experiencing a 14% rise in newly advertised rents, with supply continuing to contract.
Dr John Boyle, director of research & strategy at Rettie, said: “The housing market in 2023 is adjusting to higher interest rates.
“Demand has dropped back, but not excessively, and sales activity is stabilising and should recover in 2024, giving more buyers and sellers confidence to enter the market.
“As for the rental market, there is likely to be continued pressure on the private rented sector (PRS) as demand has not dampened in the way it has in the sales market.”
The sharp rise in mortgage rates has dampened affordability, but a recent decrease in rates has improved the situation.
In Edinburgh, for example, the average mortgage payment has reduced from a mid-2023 peak of £1,800pcm to around £1,500pcm. This trend, if maintained, could bolster market confidence.
Signs of market stabilisation include a return to pre-pandemic levels of demand and supply, particularly in Edinburgh, where supply has increased since mid-2022.
Glasgow shows a more consistent pattern with less fluctuation in supply and demand.
The rental market, however, is under significant pressure, reflected in rising rents and reduced time to let properties.
This imbalance between demand and supply is likely to continue exerting pressure on the private rented sector (PRS).
