The average price of a home in the Granite City has risen for the first time since 2017, providing further evidence that the gradual turnaround in the energy sector is beginning to have a positive impact on the local economy.
New figures from Aberdein Considine’s Property Monitor, the final report before the Brexit deadline in October, revealed that the average cost of a home in Aberdeen rose 1.7% to £202,011, the first increase since the third quarter of 2017, which itself was only 0.1%. Prices actually hit a high of £206,334 in June this year.
As the optimism around the oil and gas sector, as well as news of longer term investment plans has filtered through, demand for housing has pushed prices higher, with Aberdeenshire also enjoying a substantial uplift in activity.
Whilst both the number of properties changing hands and the value of homes sold fell in the city, Aberdeenshire recorded sales worth £221,224,685 during the second quarter of the year, a year on year increase of over £20,000,000. The Shire has also experienced growth of 9.6% in the number of transactions, with 1,048 properties sold.
Aberdeen and Aberdeenshire have seen a marked change in buying patterns during the last few months, which is reflected in the types activity in both areas. Whilst first time buyers would normally be looking for flats in and around the city, it would seem that those same buyers may be taking advantage of historically lower prices in the suburbs, and are now exploring the possibility of securing what are now more affordable, larger homes in more rural areas.
The latest figures from the ASPC also highlighted that the value of flats sold was down 2.7%, with the sale of semi-detached and detached properties up 2.7% and 24.9% respectively.
Combined, both the City and Shire registered £715,000,000 of sales during the first half of year, a rise of 2.6%, contributing to a record six months for the Scottish property market. Homes worth £8,012,564,404 were sold in Scotland between January and June this year, some £330m more than the same period in 2018, and the highest half year total since the start of the financial crisis at the beginning of 2008.
Average prices across Scotland rose 1.6% in the second three months of the year to reach £172,189. The number of homes sold also rose to 25,806, a year on year increase of 4%, with sales in Glasgow of 2,976, the highest in Scotland.
Edinburgh remained the most expensive area in the country to buy a home, rising 1.6% to £264,943 but East Lothian wasn’t far behind, almost matching its rise in prices with the growth in market values. The area saw a 15.2% uplift in the cost of a home to become the second most expensive place in Scotland with an average price of £260,399.
Overall the value of residential sales in Scotland in the second quarter of 2019 saw a 5.7% rise, to £4.6bn, with the country’s two biggest cities seeing the highest level of sales of any of the 32 local authorities in Scotland. Edinburgh enjoyed an 8% uplift to £770 million and Glasgow saw a 9.7% rise to £473m.
Dundee continued its ongoing economic resurgence with prices up 5.6% to £148,790, the number of homes sold rising 12.6% and sales growing 18.7% to £104,483,910.
Further afield, there has been a surge in more provincial areas which has fuelled much of the growth in the market.
The Western Isles experienced a 20% rise in market values, the highest of any local authority in Scotland, Argyll and Bute 18.8%, West Dunbartonshire 18.2% and East Lothian moving up 16.3%.
Aberdein Considine managing partner Jacqueline Law said bullish buyers “were taking a long tern view of the market”, amid the current economic uncertainty, and for those buying in the North-east there seemed to be a desire to take advantage of lower prices.
“Buying a house is not something people do with tomorrow or next year in mind,” she said.
It’s a considered decision which most purchasers take with a medium to long-term view – and these figures suggest people are looking beyond the current political and economic headwinds with a degree of confidence.
In Aberdeen, the last few quarters have seen a definite and positive change in the local market, much of this a result of the continuing oil and gas recovery, culminating in the first price rise for 2 years.
This is good news for sellers, but current low prices are also tempting buyers, creating a much healthier market than we’ve seen for some time.”