Investing in Dundee Property - a Portolio Property Market Update

The past 30 months have been a challenge for all of us, and that’s equally true of the property market. Looking back, it has held up better than some might have forecast and in certain sectors shown signs of strong growth.

This is as true of the property market in Dundee, Scotland’s fourth city, as it is elsewhere, although you’d be right to expect local variations.

You’ll find my thoughts from 2020 in the blog ‘Dundee Buy-To-Let Property Investing 101: Everything You Need To Know’, along with a potted history of the city.

With that in mind, it’s time we looked again at the potential of this Southern-facing city perched on the banks of the Tay and see what, if anything, has changed, and whether it still has potential for buy-to-let investors.

Bonnie Dundee

The regeneration of Dundee as part of a £1 billion investment continues apace, with changes most notable around the waterfront where the city meets the river Tay. A road system that makes sense is just one of the many benefits!

As with any city, planning and development continues and Dundee City Council has set out in comprehensive detail (read – very long!) their 2022 Local Development Plan. The usual caveats apply; the best laid plans and all that!

The Scottish Government has not yet decided where the two Green Freeports proposed for north of the border will be, with the prospectus being published in June 2022.

Dundee has submitted a bid, along with many other port towns, and an announcement of the two successful bids is expected soon. Despite reservations by some, Freeport status would be an undoubted boost for the city as a whole.

Post-pandemic, both of Dundee’s universities will have welcomed their students back to in-person learning and that return will be good news for the Private Rental Sector (PRS) in the city.

With some 20,000 students split between Dundee and Abertay universities, there is a substantial and on-going need for good quality rental properties, one of the factors which makes investing in Dundee property an attractive prospect.

Scotland’s Economic Strategy (2015) identified those sectors where Scotland has a distinct comparative advantage:

• food and drink (including agriculture and fisheries)
• creative Industries (including digital)
• sustainable tourism
• energy (including renewables)
• financial and business Services
• life sciences

Reading this, you might think that the Scottish Government had Dundee specifically in mind! Dundee has a leading role in the digital economy, and continues to build steadily in all other areas.

Property investment in Dundee

Compared to Edinburgh and Glasgow, Dundee isn’t one of Scotland’s property superstars. In truth, Edinburgh and Glasgow tend to outperform the rest of Scotland, so that’s not maybe a fair comparison!

It’s also not intended to talk down the potential for investing in Dundee property, far from it. Like so much in life, it all depends on what you’re looking for.

Dundee isn’t bucking any trends as far as property is concerned, and suffers the same supply vs demand disparity that we’re seeing nationwide. That drives prices and rents up year on year.

The data from Home.co.uk is comprehensive and shows trends in Dundee across all categories. There are expected rises in price in detached and multi-bedroom properties, but small falls in terraced properties and flats.

There is also a clear fall in the number of properties being advertised, although that could be seasonal market variations and there is a rise in October 2022 in nearly all categories.

Derek Petrie of Thorntons, writing in August 2022, has a fairly steady take on the overall property market in Tayside in general,

“The local property market is resolute with plenty of buyers still out there, and provided unemployment remains relatively low the market should remain active in the second half of this year and into 2023”

His comments echo what Morton Simpson, also of Thorntons, wrote two years ago in the Evening Telegraph:

“Within reason Dundee is a relatively safe place to invest in. The city has never really had big highs, but it has also never really seen big lows, meaning that if there is a crash in the economy, home owners shouldn’t see too much of a change.”

The clear implication is that Dundee, whilst perhaps never meteoric, is solid and constant. Depending on your specific requirements as far as property investment is concerned, this is not a bad thing at all.

Rental yields are continuing to rise as demonstrated by the most recent data from Citylets Datahub.

Again, Dundee shows a steady increase in average rental prices, continuing into the third quarter of 2022.

Advice from the property pros

‘Plus ça change, plus c’est la même chose’ as I don’t often say! Dundee has ridden out the pandemic and its aftermath as well as any section of the Scottish property market.

It’s solid, rather than exciting, predictable rather than a pitching, nauseous rollercoaster of a ride. Property prices are rising, but not in all categories and not to the dizzy peaks found in our major cities.

We’d suggest therefore that if you’re looking for a reliable opportunity, especially in the buy-to-let sector, investing in Dundee property may be ideal for you. Demand outstrips supply and flats and terraced properties are still affordable.

The city itself continues to improve its infrastructure and amenities, leaving its old industrial past behind, instead embracing new and emerging technologies. There are thousands of students seeking accommodation annually.

And finally, according to Purdie Worldwide, Dundee is still the top place to live in Scotland in 2022!

In summary…

It’s easy for those whose lives revolve around Glasgow and Edinburgh to regard other parts of Scotland as remote backwaters. This is grossly unfair, and if you’re looking for buy-to-let opportunities, unnecessarily limiting.

Dundee is only an hour away from the Central belt (Dundonians might wish it further!) and it benefits from its proximity to the river Tay and to the unspoiled beauty of Scotland’s highlands on its doorstep.

If you’re looking to expand an existing portfolio, or wanting to take your first steps on the buy-to-let journey, and you could use a helping hand, call us! We’re only too happy to talk over your options and to offer advice you can rely on.

Written by Ross MacDonald, Director of Sales & Cofounder of Portolio

Get in touch on 07388 361 564 or email to [email protected]