Aberdeen has a long track record of
bucking national trends when it comes to house prices, with one of the most
notable examples the lack of impact of the property crash of 2008.
The market was protected by the buoyant oil and gas
sector - but what goes up must come down - and the 2015 oil slump rekindled
memories of 1986 when the oil price fell to under $10 a barrel and there were
stories of Americans, unable to sell their homes, handing the keys to their
building societies and returning across the Atlantic. In one street alone, Lee
Crescent North, there were more than 40 homes for sale.
Unfortunately, the 2015 crash has meant that while
the central Scotland market has been red hot post CV19, the Aberdeen market has
been lagging well behind. However, there are positive signs that the gap might
begin to shrink as closing dates begin to reappear and stocks fall.
“Oil and gas has created a local economic
microclimate and while the rest of the country was in the doldrums, we were
fortunate enough to have that to bolster the local market,” said Bill Barclay
Head of the Residential Property department of Raeburn Christie Clark &
“Edinburgh and Glasgow were slower markets for many
years and they’ve suddenly taken off in the last five to 10. To try and buy
there at the moment is extremely difficult as supply and demand are way out of
sync and people are paying large amounts over asking prices. It is like
Aberdeen used to be 20 years ago – there is a desperation to buy.
“But I think Aberdeen is on the way back up again,
although there are still some problems. We have too many flats for sale whether
its studio, one-bedroom or modern two bedroom because a lot of those were
developed in the last 15-20 years and many were rented out and are now back on
the market for sale.
“The middle section of the market isn’t doing badly
but the one thing a slower market in Aberdeen has taught us is that if you
dress your property well for sale, with little to do to it, and it is pitched
right price-wise, it will sell and you will probably get competition to buy it.
“The bulk of the good market is between £250,000 to
£450,000. Once you get above around £500,000 things are a little bit slower but
there is still activity.
“The shire is where there has been the biggest jump
in activity because, as a result of CV19, everybody understands that hybrid
working does work. You can spend two days at home and three days in the office.
So why not spend the same money as you would spend in Aberdeen out with the city
and get something bigger?”
Alan Cumming, National Estate Agency Director for
Aberdein Considine, commented on the desire for country living and its positive
impact on the market as he reflected over the past 14 years.
“Throughout the noughties the UK property market
experienced a boom and the North-east, like the rest of Scotland, was
performing exceptionally well until 2008 when it was severely impacted by the
global financial crisis.
“However, Aberdeen was fairly resilient and
although the average sale price and volume of sales experienced a sharp
decline, it wasn’t to the same severity as the rest of the UK.
“In the North-east we bounced back pretty quickly
but the oil price decline of 2014 had a much bigger impact while the rest of
Scotland experienced a resurgence in the market fuelled largely by lower
“Aberdeen slowly recovered and by January 2020 the
market had turned a corner, prices in the city were beginning to level out and
the shire was starting to see a rise in demand - then came CV19. When the
property market restarted after the first lockdown in July 2020 there was this
huge explosion of pent-up demand which has fuelled the market for the past two
Lynne Stewart, Partner, Ledingham Chalmers Estate Agency, said the latest market report from ASPC puts the area essentially back where it was in terms of property prices before the energy industry downturn.
“There’s more encouraging news too from the latest Registers of Scotland Property Market Report which says Aberdeen saw the largest increase (39%) in residential sales volumes in Scottish cities in 2021/22,” she said.
“However, while the market value of residential property sales increased 42% compared with the previous year, it was still 48% down on 2007/8, peak market value year for the granite city.
“We’re seeing more closing dates and properties are generally selling around valuation price. Recently a three-bed semi in Bridge of Don went to a closing date 10 days after we placed it on the market. The sellers ultimately received an offer 10% over valuation.
“Similarly, in Elrick, a three-bed home went to a closing date after just eight days, with the offer coming in at almost 5.5% above valuation.
“We’re seeing a rise in activity and demand for homes in the suburbs, in particular Bridge of Don, as well as in Aberdeenshire towns like Westhill, Banchory and Braemar.
“We’re hearing from people looking further afield for a new home than they might have before, because they’re not commuting as often.
This trend is coupled with increased demand for properties with, for example, a spare room for an office, a summer house or garden room, as well as outside space.
“It’s hard to predict what we may see in the next few years — after all, who could have foreseen what’s happened over the last two?
“However, I’d expect these trends to continue for now, not least because of changes in work/life patterns as well as improved infrastructure as well as investment in the North-east.”
Savills pointed out that while the average price in Aberdeen city has remained stable, at around £147,000 in June this year, in Aberdeenshire it was £207,261 - 9% higher than June 2019 and 2% higher than the oil and gas-led peak of the market in 2013/2014.
Fiona Gormley, Residential Director, Savills, said: “The recent growth we have seen in the Aberdeenshire market can be explained by a number of factors. Scotland as a whole is very much in favour around the world as a place to live, indeed it is currently the most searched for term on Savills website. Value for money, the quest for both more space both inside and out and a better quality of life, along with new patterns of hybrid working including super-commuting to London - have all fuelled demand for properties, particularly in scenic and more remote locations like Aberdeenshire.
“The Aberdeen Western Peripheral Route, completed a couple of years before the pandemic, has made some Aberdeenshire locations more accessible to the city, increasing their desirability. In addition, the new build market in these locations, which has often been supported by housebuilder incentives, has seen a marked improvement in sales.”
Faisal Choudhry, Head of Residential Research in Scotland for Savills, said the number of residential transactions in Aberdeen city rose to 4,978 between July 2021 and June 2022, 29% more than the pre-pandemic period. In addition to more sales prices rose in the ‘evergreen’ AB15 and AB13 postcodes - the West End, Cults, Bieldside and Milltimber.
“The million pound plus market across the entire region is small. However, it is predicted to expand in line with the wider local economy which is primed for further growth over the next five years, driven by the expanding energy sector.”
Fiona added: “Dalhebity (the house belonging to Stewart Milne currently on the market for £7.5million) in highly sought after Bieldside is currently Scotland’s most expensive residential listing. It has attracted more than 55,000 people from all over the world to view the property on Savills website. Typically, we see approximately 18% of traffic coming from international locations, but for Dalhebity the figure has risen to 31%, with the US accounting for approximately 20% of overall views. Despite its sale price, the property represents relative value for money when compared with other international locations. The average price per square foot for prime property in London is £1,500, whereas for Dalhebity it sits at £247.”
The new-build market has also enjoyed a buoyant spell, driven in part by new working practices.
Sara McCraw, Sales Advisor at CALA, said: “We’re seeing the return of some balance between the ‘race for space’ and the pull of the city buzz as people settle into new routines of hybrid working, so we expect demand to continue for developments that blend city convenience with a ‘village’ feel.
“That’s why Grandhome in Bridge of Don has proven so popular, as it offers room to breathe and lots of green space with fantastic local amenities and the city on its doorstep.
“Over the last couple of years there has been a real shift in what house hunters are looking for – buyers are considering in much more detail what they really want and need from their home, and on truly optimising their space, so the ‘wish list’ for a new property has become more sophisticated.
“The key is having options that are suited to different family set ups and lifestyles – again, this is where Grandhome really delivers as there’s such a wide choice of flexible house styles available, from two bedroom terraced properties to detached five bedroom homes.”