Doom and Gloom for Dundee Property Market?

If you were born in the early 1970s or late 1960s, if you haven’t started to think about it yet, retirement is closer than you think

6.7% rise in Dundee property values adds weight to the housing crisis

Dundee’s continuing housing shortage is putting the city’s (and the country’s) reputation as a nation of homeowners under threat, as the number of properties being built continues to be woefully inadequate when it comes to meeting the ever demanding needs of a growing population.

In fact, I was talking to relatives the other day at a family get together when the subject of the property market came up in conversation - as I am sure it does at many gatherings along with the weather and politics.

It used to be that if you went out to work and did the right thing, you could expect to be in a position to buy a house relatively quickly over the course of your career – as well as going on holiday every year and saving for a pension. But now things seem to have changed. George Osborne used last year’s autumn statement to double the housing budget to £2billion a year from April 2018 in an attempt to increase supply and deliver 100,000 new homes every year until 2020. The Chancellor also introduced a series of initiatives to help get first time buyers on the housing ladder, including the contentious Help to Buy scheme and extending Right to Buy from not just council tenants, but to housing association tenants as well.

Now that does all sound rather good, but the country is only building 137,490 properties a year (split down 114,250 built by private builders, 21,560 built by housing associations and and a paltry 1,680 by local authorities).

How George is going to almost double house building overnight, I do not know, because using the analogy of a greengrocers - if people want to buy more apples, giving them more money when there’s not enough apples in the first place doesn’t really help.

Closer to home, in the Dundee local authority area as a whole, only 61 properties were built per quarter in 2015. That is simply not enough.

This shortage of supply has meant Dundee property values have continued to rise. House prices are 6.7% higher than they were 12 months ago and have risen 0.5% in the last month alone.

At school I was taught the economics game is all about supply and demand.

The demand for Dundee property has been particularly strong in the “good” areas of the town and it is my considered opinion that it is likely to continue this year, driven by growing interest among buyers (both homebuyers and landlords alike). Dundee’s varied economy means activity is expected to remain relatively strong into the early summer of 2016, especially as some buy-to-let landlords try to complete purchases ahead of the introduction of new stamp duty rules in April.

And what of supply? We have spoken about the lack of new building in the town holding things back, but there is another issue relating to supply. Of the existing properties already built, the concern is the number that are actually on the market and for sale. The number of properties for sale last month in Dundee was 575, while 12 months ago, the figure was 671 and four years ago it stood at 926 - a massive drop.

With demand for Dundee houses rising, minimal new homes being built and fewer properties coming onto the market, it can only mean one thing - now is a good time to be a homeowner or landlord in Dundee.

For more articles like this, please visit the Dundee Property Market Blog www.dundeepropertyblog.co.uk