Aberdeen house prices fall as cost-of-living and borrowing costs rise

Figures released by Aberdeen Solicitors Property Centre (ASPC) show property prices in the city have fallen by 4.4% over the past 12 months.

The drop has been 0.6% in just three months.

ASPC said a number of national factors are playing a part. These include rising interest rates and the cost-of-living crisis.

Meanwhile the fluctuating oil price and downsizing by major oil companies is believed to have dented consumer confidence.

Price decreases across property types

Flats, semi-detached and detached homes all lost value in the third quarter of the year.

The price of a typical flat in Aberdeen fell from £122,971 to £121,801. Semi-detached properties decreased from £190,690 to £189,619 and detached homes on the market saw a drop in price from £326,052 to £323,959.

A total of 1,259 properties were sold through ASPC between July to September, down 3.7% compared to the previous quarter but down 19.4% compared to a year ago.

Despite the downward prices, ASPC chairman John MacRae said the Aberdeen market had held up well since the pandemic.

He said: “Our local market had been making steady, if moderate progress, after
the pandemic.

“There had been gradual improvement in levels of activity and price, in most areas.

“Although modest in scale, the persistence of these improvements had given rise to some hope that our area was getting there.

“Since then, we have had to adjust to comparatively high interest rates, a surge in the cost-of-living index and a consequent reappraisal of the cost of borrowing.

“Given all that, our local market is showing a surprising degree of health. It is by no means as fit as a fiddle, but it is hanging in there.”

Most prices decreasing across the market

ASPC’s figures are based on a study by the Centre for Real Estate Research at Aberdeen University Business School.

They also show the house price change in Aberdeen over five years is 0.4% – the same as reported in the previous quarter.

Mr MacRae said: “Despite the sluggish housing market, we are still seeing sales and insertions holding up reasonably well.

“We can expect seasonal factors to have a further effect in the next two quarters, but I am expecting matters to improve, slowly, after that.”

Surrounding areas performance

There was a mixed picture across the north-east in terms of house prices from Q2 to Q3 this year.

• Inverurie saw the average price of a detached home increase from £311,038 to £315,824 and semi-detached properties rose from £180,040 to £180,581. Flats decreased from £130,245 to £128,924.
• Prices in Stonehaven have overall improved, with the average flat increasing from £128,860 to £130,492 while semi-detached properties rose from £175,465 to £176,725 and detached homes increased from £313,211 to £315,400.

• 

• Figures in Ellon show the detached market decreasing from £274,433 to £269,094, semi-detached rose from £159,670 to £ 160,983 and flats decreasing from £101,982 to £97,943.
• Properties classed as countryside all showed decreases – the average price for flats went from £122,853 to £119,110, semi-detached homes £190,343 to £185,271 and detached houses £343,175 to £341,433.

Mr MacRae said: “There had been gradual improvement in levels of activity and price, in most areas.

“Although modest in scale, the persistence of these improvements had given rise to some hope that our area was getting there.”