The latest ESPC house price report said the total number of homes sold across Edinburgh, the Lothians and Fife during the last three months rose by 11.3 per year to the highest fourth-quarter level since 2007.
But the average house price in the Capital stood at £202,266 following a year-on-year decline of 8.5 per cent, the fifth consecutive month to see a fall.
In East Lothian and Midlothian, house prices were also below 2011 levels. A 2.2 per cent fall in East Lothian took the average house price to £187,370, while in Midlothian an annual decrease of 3.7 per cent brought the average house price to £163,207.
David Marshall, business analyst with ESPC, said: “Buyers are using market conditions to their advantage to negotiate lower selling prices with sellers.
“Almost 80 per cent of homes sold during the last three months were secured for less than their Home Report valuation.”