Expected Scottish property price falls will impact the places and properties that have previously had the biggest rises according to analysis of the data by property firm DJ Alexander Ltd.

Since the pandemic average property prices have risen in Glasgow by the highest percentage, increasing 33.3% in the 30 months up to August 2022 which is the latest month for which there are figures. Dundee had the second highest increase at 27.4%; Edinburgh was 22.9%; and Aberdeen was 6.1%; with the Scottish average at 29.7%.

The greatest price gains by property types were in detached houses which increased by 34.1% over the 30- month period; with a 32.8% rise in terraced homes; a 32.2% increase in semi-detached properties; and 23.6% gain for flats.

David Alexander, the chief executive officer of DJ Alexander Scotland, commented: “There is now little doubt that house prices are about to stabilise and probably fall due to rising interest rates, soaring utility bills, and the wider cost of living crisis. While I don’t believe that there will be a major drop in prices a correction is overdue given the substantial price increases which have occurred over a relatively short period of time.”

“Double digit annual price increases are not normal in the housing market and yet these have been commonplace in the last two and a half years. Therefore, it is likely that this will end soon, and we will start to see some prices fall back.”

“The most likely fallers in this scenario are going to be the areas and the property types which made the greatest gains over the last 30 months. Obviously, this will not happen uniformly and there will be pockets where demand remains strong, and prices continue to be robust.”

“Glasgow has experienced considerable average price growth over a very short period increasing by one third. This is unheard of and is likely to slow and perhaps dip a little. Nevertheless, Glasgow remains a popular place to live, and its market is resilient but the scale of the gains is unprecedented so some correction may be inevitable.”

“The Edinburgh market, although not having increased by as large a percentage remains by far the most expensive part of Scotland to buy a home. I believe that even with the downward pressures on the market prices will remain stable and may even continue to rise due to the capital’s strength in attracting buyers from across Scotland, the rest of the UK, and internationally.”

“Aberdeen will also buck the trend with the announcement of growth in the oil and gas industry. While this will obviously take many years to feed through the commitment to develop so many new oil and gas fields will play a substantial part in strengthening the Aberdeen market. Our office in the city is reporting enormous demand as jobs and businesses return to be a part of the oil and gas sector.”

“Equally, the huge price increases for detached, semi-detached and terraced properties (all up by around one third in 30 months) is unsustainable and there is likely to be a drop in the pricing of these properties over the coming year. The focus during the pandemic was for properties with outside space so flats have not increased by the same margin, and I expect them to fare better in terms of any price correction.”

David Alexander concluded: “I don’t believe we are facing any major drop in prices, but it would be unrealistic not to think that there will be some reduction. The growth over the last 30 months has been astonishing by anybody’s standards and, unfortunately, many people always believe that these circumstances will never end. They always do but equally the market always recovers again. Just as with the government a period of stability is to be welcomed in the housing market in the coming year.”