Scottish new build homes have experienced a more significant price increase compared to previously existing houses, according to a study conducted by real estate agency DJ Alexander.
In the span from December 2022 to November 2023, the latest available data period, the average cost of a new construction home in Scotland jumped by £54,389 from £246,906 to £301,295, which translates to a 22.0% growth over a year.
During that same timeframe, the average price of an existing home went up by £3,372, moving from £180,093 to £183,465, which is an increase of 1.9%.
David Alexander, CEO of DJ Alexander Scotland, remarked, “We’re seeing a notable discrepancy in the pricing trends of new builds compared to existing homes.
“One factor influencing the steep price rise in new builds is the decline in their sales numbers. Nonetheless, new builds are usually designed with superior environmental and energy efficiency considerations, which means they cost less to maintain compared to older houses. This makes new builds more appealing to buyers.
“Additionally, the industry is dealing with an increase in the costs of building materials and labour. There have also been advancements in energy systems that, although more expensive, add to the general building expenses that are ultimately reflected in the sale price to the buyer,” he explained.
All main Scottish cities have seen sizeable surges in new build prices – with a 16.4% rise in Dundee, 15.5% in Edinburgh, 11.3% in Glasgow, and 11.0% in Aberdeen. In contrast, Dundee experienced the highest rise in existing home prices at 3.4%, and Edinburgh at 3.3%, while prices in Aberdeen and Glasgow actually dropped by 1.2% and 0.7% respectively.
Recent trends in Scotland have shifted, with new builds seeing an increase of £51,563 in price countrywide from December 2019 to November 2022 – a figure that is notably less than the growth observed in the latest year. Existing properties have had a comparable increase to new builds, rising by £36,844 over that span.
Alexander further stated: “The ongoing rise in new build sales plays an essential role in the overall health of Scotland’s property market, and the reduced sales numbers over this year are a cause for concern. As the demand for more housing in Scotland is becoming increasingly pressing, it is of utmost importance that construction ramps up to satisfy this need.”
“However, a major driving force behind these substantial price increases could be the location of the new properties. Many new builds are strategically positioned on city outskirts, perfectly suited for commuters traveling to major areas of Scotland. As a result, a new build on the outskirts of Edinburgh, for example, might be more conducive for those who work in Glasgow than a traditional home in the city centre,” he further illuminated.
