Scottish house prices continue to drop – except in Dundee


By Alexander Lawrie

WITH the credit crunch in full flow Scottish house prices have continued to plummet – except in Dundee.

The City of Discovery is bucking the current trend and new figures show house prices in the city jumped by an amazing 23 per cent during the last quarter.

Only Glasgow has shown a similar leap with the price of an average house up six per cent.

Overall, in the three months to July 2009, the average house price in the country dropped by 1.4 per cent overall.

Indications from the Scottish House Price Monitor from Lloyds TSB indicate the market is beginning a turnaround with this quarter’s figure substantially less than the previous quarter of a 4.3 per cent drop.

Slight recovery

But the recently released statistics show the average price for a home in Scotland is down by 6.2 per cent on last year.

The recovery can also be seen in the number of house transactions, which reached its lowest point during May, but have since jumped by 35 per cent during July.

But the total amount of house buying has fallen by 38 per cent than in the same period as last year.

After a substantial rise last year, average prices in Aberdeen fell by 7.6 per cent in the last financial quarter, giving a yearly fall of 12.2 per cent.

In Edinburgh average prices failed to move and is showing an underlying annual fall of 3.5 per cent.

But it is in Dundee where the greatest optimism lies.

House prices in the city jumped by 22.9 per cent reversing the large fall of 16.9 per cent last quarter. The underlying drop compared to last year is 15.8 per cent.

The south west, excluding Glasgow, showed a quarterly fall of 1.8 per cent and an annual fall of 6.3 per cent.

But the largest reported fall came in the south east, excluding Edinburgh, where the house price figures dropped by 9.7 per cent.

The average price of a flat has fallen for the last five consecutive quarters, but the latest fall is only 0.3 per cent sparking hopes of a turnaround during the next quarter.

Terraced house average prices only dipped by 0.4 per cent, while the average price of a semi-detached house fell by 5.9 per cent, giving an annual drop of 6.2 per cent.

Professor Donald MacRae, Lloyds TSB’s chief economist, said: “There are positive signs that not only has the bottom been reached but that a recovery is about to take root.

“Consumer confidence has recovered with retail sales increasing at an annual rate of plus 6.6 per cent in June.

“The cost of borrowing has reduced for many mortgage holders while there is a small perceptible increase in the level of mortgage availability, particularly for first time buyers.”

The housing market in Scotland reached its lowest point of this year in May when the lowest amount of transactions was recorded.

Since then sales figures have increased during June and July with average house prices also showing a marginal increase during these two months.