Soaring property prices in Perth and Kinross have overtaken oil-rich Aberdeen for the first time.
A new study of Scotland’s housing market has revealed the average cost of a home in the region climbed to £203,398 during the third quarter of the year.
The 6.1% year-on-year increase follows a near 10% rise recorded during the second quarter, as the area enjoys its most sustained period of price growth since the financial crash a decade ago.
The details emerged in Aberdein Considine’s Property Monitor analysis for Scotland.
James McKay, who manages the firm’s Perth office, said a shortage of stock coming on to the market was inflating selling prices to the extent that the £203,398 average was now more than the £200,832 cost of a home in Aberdeen.
“There has been upward pressure on selling prices in Perth and the surrounding areas all year due to a lack of homes available for sale,” he said.
“This has resulted in many of the properties coming to market selling within days or sometimes hours – and often for well in excess of home report value.”
He said estate agents were keeping a close eye on new-build activity, which is expected to increase, easing the pressure and maintaining affordability levels.
Council chiefs have said 1,000 new homes are needed every year to keep pace with demand in Perth and Kinross.
Officers are currently fine tuning the revised Local Development Plan for the area, which will identify large swathes of land for potential housing.
The Aberdein Considine research reveals Perth and Kinross also recorded a 7.7% jump in the volume of sales, with just under 900 transactions registered.
Mr McKay added: “The majority of the activity during recent months has been around the £130,000 to £150,000 mark. In particular, we are still seeing ferocious demand for terraced houses in the Western Edge or Craigie.
“Ex-local authority homes in Letham and North Muirton are also in demand, particularly among first-time buyers, due to the size of rooms.”
Across Scotland, sales topped £5 billion during the quarter, with the average home in both Edinburgh and East Renfrewshire now costing more than quarter of a million pounds.
East Renfrewshire recorded the highest average price in Scotland, reaching £261,512, up 5.9% on the same time last year.
The Glasgow suburb is just ahead of Edinburgh, which saw average prices rise 6.6% year-on-year to £257,220.
Mr McKay added: “The property market in Scotland as a whole is enjoying a spell of growth not seen since the halcyon days prior to the financial crash of 2007/08.
“More than 28,000 homes changed hands during the third quarter of the year, up nearly 4% on the same period last year and almost 2,000 more than Q2.
Scotland’s Property Monitor – which includes independent market research – also reveals concerns about the Scottish Government’s second home levy, known as the Additional Dwelling Supplement (ADS).
The tax, brought in by the then Finance Secretary John Swinney in 2016, charges an additional 3% levy on buy-to-let properties worth more than £40,000, on top of any other Land and Building Transaction Tax due. The changes added an additional £6,000 tax to the purchase of a second property at £200,000.
More than six in ten people polled by Aberdein Considine and The Times said the additional tax has put them off investing in a second property.
“This is consistent with the attitudes we’re seeing on the ground across our 19 offices and is what the tax was designed to do,” Mr Fraser said.
“However, the Private Rented Sector meets a significant portion of Scotland’s housing needs. If future landlords are being driven away, the government will need to match its appetite for additional taxation with similar vigour for house building – because the housing need is not going to go away.”