Statistics for the second quarter of 2009, released by the Edinburgh Solicitor and Property Centre (ESPC), show that the average house price in East Central Scotland decreased by 11.0% annually during the second quarter of 2009.
The fall means the average selling price of a property in the region now stands at £191,095.
More recently though there were signs of stability, with prices in many East Central areas remaining level or rising slightly over the last five months.
In Edinburgh prices are 11% lower than a year ago, but the average house price rose from £195,895 during the first three months of 2009 to £207,890 during the second quarter. The ESPC figures show that the monthly average recorded in the Capital has risen each month since February.
The number of properties selling has also shown a steady increase since the turn of the year. A total 634 sales were recorded across East Central Scotland in June alone - the highest monthly total since August 2008 although still well below levels witnessed over recent years.
The volume of property sales in Edinburgh was down year on year by 45.7% from 2,080 proprerties in Q2 2008 to 1,130 in Q2 2009 and the value of sales in the same period was down 51.7% from £486.4m to £234.9m.
With the Bank of England expected to maintain its lowest interest rate in history of 0.5% for some time demand has begun coming back and home sellers are seing a slight improvement in market conditions.
The number of Fixed Price properties achieving their target in the second quarter was 33.2%, up from 22.4% during the first quarter of the year. Meanwhile, the average premium achieved on properties sold at Offers Over crept up from 3.3% to 4.0%.
Commenting on the results Ron Smith, ESPC chief executive said: "In simplistic terms, what we are seeing is that house prices are lower than they were 12 months ago, but over the last few months values have generally either remained stable or risen slightly. The number of properties available for sale has come down from over 6,000 last year to 4,300 today. This has eased competition amongst sellers and key indicators such as the number of sales and the proportion of Fixed Price properties achieving the asking price have shown some improvement since the turn of the year."
Smith added: "Whilst there are grounds for cautious optimism it is worth taking these results in context. The improvement we have witnessed has come from a historically low base and the economic picture remains volatile at this stage. With that said the results we have witnessed so far this year continue to be more robust than many homeowners may have expected."
Robin Stimpson, ESPC chairman concluded: "We are continuing to see signs of an upturn in activity in the market with more properties selling and prices in some areas inching upwards in recent months. Looking ahead, we are likely to see the annual fall in prices rise in July when figures will be compared with those from the peak of the market. Thereafter we are likely to see a great deal more stability in prices towards the end of the year, although sales volumes are likely to remain constrained making averages for particular towns and districts somewhat more volatile than under normal market conditions."