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Scottish average property prices increased by almost 10% in 2021, led by growth in the cost of larger homes, according to an analysis of the latest data by property firm DJ Alexander.

The estate agency, part of the Lomond Group, said that between January 2021 and December 2021 average property prices in Scotland rose by 9.5%, led by gains in Edinburgh.

The Scottish capital experienced the largest average increase at 10.6% with Aberdeen the lowest among Scotland’s largest cities at just 2.2% with Dundee up 9.5% and Glasgow increasing 8.3%.

However, it is the increase in average prices for detached, and semi-detached homes which is most striking with double digit growth in all cities with the exception of Aberdeen whose detached homes increased by a healthy 8.1% – an increase of £27,318 – but were lower than the rest of Scotland due to continued uncertainty over the future of the oil and gas sector.

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Detached homes across Scotland increased by an average of 15.4% which is a £44,182 increase on 2020. However, Edinburgh topped the market overall with an average annual increase of £110,181 in the price of detached homes which equates to a rise of 18.3% year-on-year.

Glasgow had the second highest increase with a rise of 17.8% which is an average £67,067 higher over the year with Dundee increasing 15.1% which is £41,843.

Semi-detached and terraced properties experienced strong double-digit growth in Edinburgh and Glasgow, while Dundee’s largest properties also recorded high increases over the year. Flats had the lowest growth with a 4.1% increase in average prices across Scotland ranging from a rise of 7.8% in Edinburgh to a fall of 0.9% in Aberdeen.

David Alexander, chief executive officer of DJ Alexander Scotland, commented: “These figures reflect a very mixed picture across Scotland. While it is positive that there has been an overall substantial rise in average prices in the country it is clear that there are major differences in the performance of the market both geographically and by property type.

“Aberdeen remains flat and is unlikely to improve until there is some clarity over the future of the oil and gas industry. However, even despite the economic uncertainty the strength of pricing for the largest homes in Aberdeen remains the strongest sector even in the weakest city market.”

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He continued: “Edinburgh’s continuing popularity is remarkable and the increase in average pricing for detached houses is extraordinary. An increase of £110,000 on average for detached properties in just one year is unprecedented and, I would have to say, unsustainable in the long term. The buoyancy of the market has been unbelievable and the money available to pay these substantial amounts for property shows that the strength of Edinburgh’s property market has both deep roots and deep pockets.

“Glasgow and Dundee have also had a remarkable year with larger properties producing outstanding growth in 2021. With Edinburgh and Glasgow both having a near 20 per cent rise in average property prices for detached and Dundee at just over 15 per cent we can see that the top end of the market remains strong across Scotland which is a welcome outcome.”

Alexander added: “I believe that these figures represent a peak since, for me, there is really only one way for them to go in the next couple of years. There won’t be a sudden fall or drop in the market as the number of properties available remains woefully low, but I don’t think that substantial increases of this scale are sustainable in the medium to long term.

“I think we will continue to have positive growth but nearer the historic levels of between three and five per cent a year with outlier pockets of stronger activity continuing to surprise and make headlines but overall, a steadier market.”

By MARC DA SILVA

Source: Property Industry Eye

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