A strong prime property market in Aberdeen for 2019 is set to continue next year.
That’s the view of new residential research by estate agency Savills.
The report, Spotlight on the Residential Property Markets of Aberdeen and the North East, reveals the house market recovery has been led by prime properties, above £400,000, and commuter areas within easy reach of the city.
However, high stock levels in other sectors of the market continue to suppress overall prices.
Faisal Choudhry, head of residential research for Savills in Scotland said: ‘Despite property prices struggling to find their level since the energy market downturn, activity in the housing market of the Aberdeen area provides early signs of recovery in some locations.
‘The combined annual number of transactions across both Aberdeen and wider Aberdeenshire has now held firm at just under 8,000 for nearly three years, with average selling prices currently at £146,000 for the city and £189,000 for the shire.
‘Prime activity is accelerating above £400,000 with a 6% increase in the number of transactions during the 12 months ending August 2019.
‘The leading hotspot is the AB15 postcode district, which includes the West End, suburbs of Cults and Bieldside, making up almost 30% of activity. Other traditional hotspots that previously witnessed significant levels of activity prior to the downturn are now also seeing a recovery.
‘These include more populated areas in the city, but growth is also filtering into areas such as Milltimber, Deeside generally, and the Cairngorms National Park.
‘Saturated levels of stock at levels below £250,000 is curtailing overall price and transaction levels. However, demand is now strong within the prime market above £400,000.
‘Trends within the residential market tend to follow the wider oil-dependent economy. A stabilising local economy throughout 2018 has helped buyer confidence.
‘Overall economic output by the end of the year is expected to increase for the first time since 2014 and we anticipate a subsequent surge in buyer activity. Activity will continue to recover, provided sellers maintain realistic price expectations.’
Fiona Gormley, Savills residential director in Aberdeen said: ‘This year Savills has seen a 31% annual rise in the number of people registering to buy property across all price bands in Aberdeen and the North East, along with a 20% increase in viewings. This bodes well for the market.
‘Transactional recovery has occurred even though house prices fell annually by an average of 3.5% Despite more realistically priced properties being launched, this trend looks set to continue as there are currently over 5,500 properties available to buy across the market as a whole compared to 2,500 before the downturn. An expected overall annual drop of 2.5% in Aberdeen area prices at the end of 2019 should not come as a surprise.
‘We expect price drops to ease in 2020, but only if stock levels begin to reduce. This might enable a recovery from 2021 with 3.5% growth over the five year period between 2020 and 2024.
‘The prime market will remain robust, provided sellers maintain realistic price expectations in line with market conditions to ensure their property is sold rather than merely listed.’
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