Leader: House prices - 'We seem to be on the long road to recovery'

Published on Saturday 5 December 2009 09:41

WHISPER it, but is it possible that we are starting to see a bounceback in house prices and in the general health of the property market?

It would certainly be a welcome bit of pre-Christmas good news for home owners if this was the case, after a lean year in which sales plummeted and the spectre of negative equity returned.

Let's start with the health warnings: we are not out of the woods yet.

The 18 per cent year-on-year rise in average house prices in Edinburgh which we report today is at least partly down to the even more parlous condition of the market in November 2008.

And even if there does seem to be scope for optimism in the short-term, some experts predict it won't last. Last week Howard Archer, of IHS Global Insight, described the recovery as "heavy-legged" and predicted "a modest relapse in 2010".

But in assessing these warnings it is worth recalling the pundits who this time last year were predicting nothing short of global financial Armageddon.

Sure, it has been a tough year – and more so for the thousands of Scots who have lost their jobs than for those who have been unable to sell their houses.

Yet the fact of the matter is that the economy did not disappear over the precipice in 2009. Generations of economists will argue about why that was – as well as Gordon Brown's self-proclaimed role in "saving the world".

But the recession did not become a depression, and we do appear to be on the long and slow road to recovery.

We can reasonably look at today's housing figures in that context. And they do offer some glimmer of hope.

The average house price in Edinburgh rose from 191,272 last November to 225,449 this year. The volume of sales also went up – by 50 per cent. The number of homes which hit their asking price also rose by 25 per cent, to about half.

As the housing market enters its traditionally quietest period over the festive holidays, this should boost optimism for the New Year, especially in Edinburgh where for some time this year it did look as though house prices were lagging.

The News has always taken the view that the Capital, with its strengths in finance, tourism and research and academia, was well-placed to come out of the recession.

Today's housing figures don't alter the fact that the city and the national economy as a whole still have a long way to go.

But it's a start.