The residential property market in Dundee is, like many other places in Scotland, off to a slower start in 2023, but everything is relative. It only feels quieter at the moment in comparison to the buoyant, or even slightly manic market of the past couple of years.

While the prices being achieved over Home Report valuations may not be as stellar as in 2021 and 2022, there is still a high demand for the limited stock available and good properties are shifting off the shelf as quickly as they ever did.

Generally interest levels in properties vary and it is still early in the year to expect any hyperactivity, so it is reasonable to assume that things will start to improve as the year rolls on and the nights get lighter.

Of course, cost-of-living issues – which show no sign of easing – and surging interest rates have had a dampening effect, and what might have seemed affordable for many people a year ago may now be out of reach. Add energy costs into that mix and it is hardly surprising that some people are choosing to err on the side of caution.

That said, there are signs of encouragement and whilst we are not at the stage of last year where there were countless buyers for every property, there is a reported increase in interest and activity, compared to the last two months.

Taking micro-movements out of the market equation, it is fair to say that Dundee’s prospects are looking bright. The city is simply a fantastic place to live, work and play and there is a feeling in the air that it is coming up with a momentum that has years to run, backed by generous funding and welcome outside investment.

Following the success of the first V&A in the world outside London, housed in a dramatic building by Japanese architect Kengo Kuma and centre-piecing the £1 billion transformation of the Dundee waterfront, the latest attraction of which is to be the Eden Project.

Scheduled for completion in 2025, the £7.6 million eco-development on the site of former gasworks will focus on the history of the city’s nine incorporated trades and is projected to create 500 jobs and contribute £27 million a year to the local economy.

Also due in two years’ time is the 4,000-seat, space-age Esports Centre digital arena which will build on and accelerate Dundee’s rich gaming heritage, creating jobs as well as the provision of digital education and life-long skills.

For a small city in UK terms, Dundee certainly has a lot to offer – such as not one, but two, prestigious universities – and its housing stock is mixed enough to provide opportunities for a wide variety of buyers.

Broughty Ferry, once a fishing village, and later home to many senior figures of the Dundee jute industry, is an attractive area to the east which is always in high demand and will continue to do well. Other areas to the north and west, such as Dykes of Gray, Liff and Birkhill have become hugely popular, possibly as a consequence of the pandemic-inspired rush to be closer to the countryside.

Even areas formerly overlooked by house hunters, such as Fintry, off the A92, and Douglas to the north-east, have experienced a surge in popularity, illustrating once again the strength of demand.

Flats in and near the city centre have done well, although demand for them may now be appearing to taper since buy-to-let investors were sideswiped by the Scottish Government’s sudden 50% increase in the second homes tax. That being said there are still plenty of lucrative investment opportunities and bargains to be had.

While in general landlords face tougher regulations than ever before, the demand for rental property is exceptionally high and rental prices for all property types have been rising steadily throughout the last few years.

Family homes in more residentially focused areas within the city and on the outskirts have again seen record prices, with sales figures boosted by the last few year’s favourable interest rates, when buyers could increase their mortgage amounts in order to allocate more of their funds to bidding over Home Report values.

Bungalows continue to, and always tend to do well, powered by downsizing buyers who have plenty of equity from the homes they are selling. Stone villas, of which there are many fine examples in and around the city, are a popular choice, and your money for such will go much further in Dundee than in other Scottish cities.

Anecdotally, new build which has been doing exceptionally well in the last few years has taken its foot off the gas a little, but there are still substantial developments with new phases to come such as at Balgillo Heights by Broughty Ferry, virtually an entire new village at Dykes of Gray and Miller Homes substantial project at Strathmartine Park in Dundee.

All in all, as expectations continue to return to more sustainable levels, Dundee with all it has to offer, will no doubt continue to do well, even with a less crazed and slightly calmer market environment.

Chris Stark is a Director in the Dundee office of DM Hall Chartered Surveyors.

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