Median price at August 2008: £147,461

General increase since Sept 2007: 8%

Projected increase to Sept 2009: 0%

Five-year increase: 119% (£67,243)

Ten-year increase: 185% (£51,775)

The complete Dundee price guide

For the past two years we’ve suggested that the City of Discovery, with its cheap period housing and captive student population, represents one of the best buy-to-let opportunities in Europe. This time around it is a tough market to call — even for George Solley of the city’s premier agent Thorntons.

“It is a statistical nightmare this year,” he says. “Annual figures will show a reasonable increase in most categories but sales are thin on the ground. Prices are falling, but overall they will still be up on last year.”

The volume of sales is well down. Solley says: “Price increases for the period ahead are unlikely unless finance is sorted out and that seems some way off. New-build sales are way down as investors and buy-to-rent buyers are just not there. Sales of units with incentives to owner-occupiers is the only real market in new homes.”

He confirms that students and parents are not buying this year. “Supply from sellers is there, demand from buyers is there but mortgages are difficult for those without deposits and they are the key to it all. Stock availability is at an all-time high and prospects are exceptional for those with their finance in place.”

But with the structural issues of mortgage liquidity and getting first time buyers onto the ladder, we believe that the current picture in Dundee will be more blip than bust.

The key to Dundee both as a city and a property market lies with a general air of optimism evident in its streets. Indeed, from an estate agency perspective, Dundee is refreshing precisely because its market lacks both the public and professional cynicism of the selling climate in our two main cities.

Since the late 1990s, the city has reinvented itself as a hub of academic excellence, and with the influx of affluent professional relocators, Dundee has seen a concomitant rise in property prices, a broadening of its housing stock and a raft of new building that is addressing buyer demand more successfully than in any other Scottish location.

It is thanks to the flood of new money into the city and the emergence of a paper rich and professional property owning class for the first time. Last time we reported that a new sector has been added to Dundee’s built environment. These new upmarket new-builds, priced from £350,000 to £500,000, are still the acme of the Dundonian’s current aspirations in the one Scottish city to wholeheartedly embrace new homes.

Furthermore, with space to experiment on the city’s outskirts, developers have turned their back on the cramped three-bed semi, offering instead the distinctly “non-Scottish” four-bed detached instead.

We agree with Solley that Scotland’s three-bed family home style, especially around the £250,000 stamp-duty threshold, looks to be the most vulnerable sector. Both buyers and professionals confirm that the mass-built three-bed rarely offers value for money and it certainly doesn’t chime with buyers’ current aspirations. If the market can ride out the storm, we’d expect to see these uncommon four-bed homes coming more to the fore in the coming decade.

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