Regeneration

The £1 billion sustainable regeneration Dundee Waterfront project will transform eight kilometres of waterfront land, bringing new housing, office, retail and exhibition space to the city. The focal point of this will be the impressive V&A museum and a promenade which are due for completion in 2016. Furthermore, upmarket hotel Malmaison has opened nearby and the train station is being considerably upgraded. New shopping centres and cinemas are planned.

Dundee University has consistently performed strongly in university league tables and has built a formidable reputation for medicine, nursing and dentistry. Students account for 24% of the Dundee City population and partially, but not totally, explain the considerable growth of the 16 to 29 age group in the 2011 census (see Graph 3). There is also a young professional cohort generated by the health sector supplementing the population growth in this age group.

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Across the rest of Tayside the population has grown considerably more than the Scottish average of 4.6%. This has been driven most notably by those aged 45 to 64 and particularly high growth of those aged 65 and above. The property market in Tayside is likely to be further influenced by the demands of downsizers and retirees who require a property to suit their current lifestyle demands.

The demographics of Dundee generate a strong private rented sector. 17% of Dundee City households are privately rented, the largest percentage outside Edinburgh. Citylets reports that demand is highest for one and four bedroom properties, reflecting the student and professional composition of the city. Dundee City’s average rental price was £595 during the first three months of 2014, up 4% compared with the same period last year.

New build market

There has been considerable undersupply of new build homes across Tayside, with private house building falling by 52% over the last five years. However, the situation is improving, with the number of completions increasing in 2013, and we anticipate this to continue. In Perth, the first large site in almost a decade has recently launched.

There are further developments planned in Auchterarder, which has been consistently popular with the family and downsizer markets, and has the highest price per square foot/metre in Tayside (see Table 3). Furthermore, sites in Monifieth and Arbroath have the potential to help quench the demand from the Dundee market. Table 3 demonstrates the premiums achieved in well connected areas where supply has been limited.

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The market in 2014

■ We anticipate a recovery in second home sales, traditionally a key aspect of the Tayside residential property market, as economic confidence returns.

■ Dundee is poised for future growth and is benefiting from £1 billion of sustainable regeneration focused on the city’s waterfront.

■ A decisive ‘No’ vote at the referendum would bring an end to uncertainty and on this basis we forecast steady growth in both prime and mainstream markets, in line with the rest of the UK.

Taken from
Spotlight: Tayside Residential Market