A 'saw-edged' recovery is underway in the mainstream and prime residential property markets in Scotland, according to a new report from Savills.
Savills' Autumn 2009 Spotlight on Scottish Residential Property Market has reported that activity in Scotland gained momentum during the summer, resulting in increased sales and a stabilising of Scottish residential property values.
In Q2 2009, there was an increase of almost four per cent in the average price of Scottish residential sales, following price falls during the previous two quarters.
From Q1 2009 to Q2 2009, Aberdeen's average residential sale price increased by three per cent, Dundee by six per cent, Edinburgh by seven per cent and Glasgow by six per cent.
Price falls in prime markets above £400,000 have also reduced substantially and a good proportion of the best properties in central and accessible locations are now holding their values.
The improvement in market sentiment is now being further enhanced by a gradual increase in the availability of mortgage finance.
However, the report warns that: "It is important to note that unemployment numbers may not yet have peaked and significant economic growth is unlikely to return until 2011. In such circumstances it is difficult to rule out the possibility that prices may falter by the end of this year.
"However, because affordability has been dramatically over-corrected, we believe any further falls will not be significant. Against this backdrop we anticipate long-term saw-edged recovery in the residential market, which will be influenced by the prevailing economic climate, the improved availability of mortgage finance and seasonal fluctuations."