Demand for new homes is outstripping supply, leading to fears Aberdeen is facing a rising house price bubble.
Iain Innes, managing director of Bancon Homes, said the rise in sales has prompted his firm to start work on a new development of flats in Aberdeen city centre, dubbed Aspire, and also plans to build more executive-style homes in Aboyne.
Innes said the family-owned builder was expecting its “biggest year to date” in terms of sales in 2014. He said: “The market in Aberdeen continues to grow apace, with demand outstripping supply.”
He said he did not think the Aberdeen market was overheated and that 10 per cent growth in prices was “sustainable in the short term”.
Last week, Registers of Scotland said Aberdeen had the highest percentage rise in house prices in Scotland, with values jumping 9.9% compared with the same period last year, to an average of just over £210,010.
Blair Melville, Head of Planning Strategy of industry body Homes for Scotland (HfS) said local authorities in the region were taking a “proactive” approach to supporting house building, although he warned planning issues could slow development.
He said: “Whilst we commend Aberdeen City and Shire’s pro-active approach in pushing forward their new Local Development Plans, we remain concerned that too many obstacles are being placed in the way of builders, from a lengthy list of developer contributions to potential new policies on strategic transport contributions. “We need to ensure such burdens do not threaten the viability of projects so that a full range of housing options can be delivered,” he added.
Meanwhile, new figures published yesterday showed British construction grew at its fastest pace since September 2007.
The Markit/CIPS construction PMI rose to 59.4 in October, beating economists’ expectation that it would hold steady at September’s reading of 58.9.
House building was the strongest sector of construction for another month. Howard Archer, IHS Global Insight economist, said “sustained healthy but not excessive growth” in the housing market was “of critical importance”. British property prices have been soaring, something that has triggered concern among some analysts about sustainability.