The Inflation Effect
While 2022 has recorded a record volume of £1m+ sales, this has partly been the result of inflation naturally moving values up into a higher category.
Factoring house price inflation from 2021 to 2022 of 6.6%, there are around 130 properties that sold in 2022 that would have likely been under £1m the year before.
This upward price movement has also meant that not only the number, but also the geography of the Scottish £1m+ market is expanding. There are 63 postcode areas in Scotland that have recorded £1m+ sales in the past three years but had no £1m+ sales in the preceding three years.
New Demand, New £1m+ Areas
Some of the £1m+ locations show the emergence of new demand. Fife, particularly in the area around St. Andrews and the East Neuk is a prime example. From 2017 to 2019, there were no £1m+ sales in this region, but in the past 3 years there have been 17. In 2022, St Andrews (KY16) recorded 17 £1m+ sales including a £3.6m sale that exceeded £2,000/sqft.
The Rise of the Suburbs
A rise in sales in rural towns and regions accounted for almost 25% of £1m+ sales over 2020 and 2021. In 2022, while rural living still accounted for around 22% of £1m+ sales, the majority of the market remained in urban areas. One of the trends that has emerged initially in 2021, but has cemented itself in 2022, has been the rise of £1m+ sales in Edinburgh’s suburbs.
Concentration on the East
Historically, Edinburgh’s New Town (EH3) has consistently topped the charts as the home of £1m+ sales in Scotland, However, in 2021, EH3 lost its crown to West Edinburgh (EH12) and last year, 2022, the Southside (EH10) came top of the £1m sales ranking, with EH3 tied second. This change can be attributed to a couple of market trends. First, there has been an increasing pressure and demand for family housing, especially within desirable neighbourhoods with high quality housing and good school catchments, such as Edinburgh’s Southside. Another reason is new build development. In 2021, the CALA Homes development at Donaldsons brought a unique and high-quality urban lifestyle to the city and in 2022, the Craighouse development has delivered high specification townhouse living in the leafy suburb of Craiglockhart. Elsewhere in the city, areas such as Newington have seen prices rise and push over £1m. In 2020, there was only one £1m+ sale in the EH16 postcode, but in 2022 there were seven.
£1m plus sales in Scotland by location, 2010-22