April Fools Day was no joke for some landlords, as they rushed their buy to let property purchases throughout late March to beat the extra 3% land and buildings transaction tax Holyrood imposed on buy to let properties after the 31st March 2016. Because some investors brought forward their 2016 property purchases to save the extra tax, speaking to fellow property professionals in Dundee, all of us have noticed, since the clocks went forward, demand to buy in April and May from these landlords has eased.
Then we have the Brexit issue, which is also having a tempering effect on the Dundee property market – although if you recall I wrote about this a few weeks ago and whilst an exit will have an effect – it won’t be the end of the world scenario some commentators are suggesting. Dundee property values are 4.9% lower year on year, although most of that was drop was in 2015. A very recent Royal Institution of Chartered Surveyors survey of its members, states that only 17% of those surveyed believed property values would increase over the next Quarter compared to 44% at the end of 2015.
All this had led to increase in the number of properties for sale in Dundee. In the city, there were 575 properties for sale in February. Three months later, there are 682 properties available for homeowners and landlords alike to buy in Dundee (ie a rise 19% more properties for sale). These figures are mirrored in neighboring towns throughout the Fife and Angus area.
Nevertheless, I believe this easing of the Dundee property market is a good thing, as investment landlords wont have to pay top dollar to secure a property because of the lower competition. On the face of it, this easing should be bad news for the 50% Dundee residents whom are homeowners, but nothing could be further from the truth. The majority of homeowners that move, move up market ie from a flat to terrace/town house, then a semi and then detached, so whilst last year, you would have achieved a top dollar figure for your property, you would would have had to have paid an even higher top dollar to secure the one you wanted to buy. The Swings and Roundabouts of the Dundee Property Market!
However, all the signals suggest that whatever the aftermath of the approaching EU referendum, in the long term, the disparity between demand for Dundee property and the Supply (i.e. the number of actual properties) will still exercise a sturdy and definitive influence on the Dundee property market. It would surprise me that if by 2021, whichever way we vote in late June, assuming we don’t have another credit crunch or issues like a major world conflict, property prices will be between 12.5% to 14.3% higher than they are today in Dundee.
