New research into Aberdeen’s housing market suggests the prospects for a long-term recovery are good, though sellers’ price expectations are currently creating a glut.
The study, by property firm Savills, reveals the oil price shock has led to a 24% fall in sales in the Granite City over the past two years.
And it says that while house prices in Europe’s energy capital rose by 11% between 2013 and 2014 at the peak of the market, they have since dropped by 7%,
A further 8.5% fall in prices is anticipated by the end of 2018 before a “gentle recovery”.
According to Savills, 8,577 city homes were sold during the year to September 30. This is compared with 11,253 for the year to September 30, 2014.
The report says the number of homes sold at the top end of the market – those worth more than £1million – fell to just eight during the latest period, from 29 two years ago.
Fiona Gormley, head of residential property for Savills in Aberdeen, said yesterday people looking to sell relatively quickly “may wish to consider setting significantly reduced asking prices”.
And she warned: “The lack of adjustment in pricing, coupled with a continually decreasing number of transactions, is leading to an ever-growing glut of properties that are currently available to buy in the Aberdeen area.”
Faisal Choudhry, head of residential research for Savills in Scotland, added: “Providing house prices adjust in the short term to realign them to buyer expectations, the prospects for the medium to long-term recovery are good.
“The Aberdeen market will continue to be underpinned by high quality housing, top-performing schools and universities, good local amenities, improving infrastructure and an increasingly diversified local economy which is not solely dependent on oil.”