The north-east has enjoyed its best year for home sales for nearly a decade, according to one local expert.
And Alan Cumming, national estate agency director at law firm Aberdein Considine, expects this improved performance in the Aberdeen and Aberdeenshire property sector will continue throughout 2022.
He told The Press and Journal: “Last year was generally a great market across the whole area – perhaps surprisingly as the major battle against Covid-19 was still continuing. It was the busiest year since 2014.
“In particular, houses in excellent condition in the city and throughout the north-east were in big demand in 2021 – they were flying off the shelves as soon as they went up for sale.
Biggest concern
“There is definitely a continuing lack of decent-quality housing for sale in the area – this is my biggest concern for 2022.
“I would say the stock of property for sale in the north-east today is down 25% on the start of 2021.
“But significant buyer demand is still out there and I expect the homes market in our area to perform well throughout 2022.”
The continuing recovery in the north-east property market following the oil and gas industry downturn in 2014 has been confirmed by latest data from the Bank of Scotland.
Aberdeen home prices were reported to be ahead by an average 8.4% to £217,678 in 2021 – earning it a place in Scotland’s top 10 for highest house-price growth.
Mr Cumming said the impact of the pandemic resulted in a surge in the number of people in the north-east working from home – and this led to a growing desire for houses with plenty of space.
Significant buyer demand is still out there and I expect the homes market in our area to perform well throughout 2022.”
Alan Cumming, Aberdein Considine.
He added: “Covid-19 made many people reassess their needs. They don’t want to be cramped in a small home without any outside area 24/7. They want space to spread out in much bigger homes, with gardens.
“Homeworking at least part of the time means much less commuting to the city than previously for many people with employers in Aberdeen, so they are happier to live further out at locations such as Alford, Aboyne and Inverurie.”
But the market for most flats in Aberdeen city centre is less active than that for homes across the north-east.
Mr Cumming explained: “Good flats for sale in first-class condition in nice locations are going well, but other flats can be a difficult sell.
“In days gone by, a typical first-time buyer would have been looking at a tenement-style flat for their first home, however, now the appeal of new-build properties on the outskirts of the city are luring buyers away from the core city centre.”
Mr Cumming said a rapid revitalisation of the heart of Aberdeen was key to improving the market for flats in the city centre.
He wants to see Union Street and surrounding streets transformed into an attractive location for people to live and work, while also pulling in visitors to eat, drink and enjoy other leisure activities.
At the end of last year, regeneration of the city centre and beachfront was given the go-ahead at a city council committee meeting.
Mr Cumming said: “These moves by the council are to be welcomed, and the sooner they happen the better.
“People don’t want to spend any extended time in the city centre just now – we must make it a desirable destination.”
Stuart Dunne, managing partner in the Aberdeen office of Shepherd Chartered Surveyors, confirmed the local property market had experienced a rebound, particularly in the £150,000 to £400,000 price bracket.
He said well-presented mid-market houses in walk-in condition had been selling particularly well.
So too have been properties with gardens, entertaining space and homeworking space.
Mr Dunne added: “With families requiring to spend a lot of time at home over the past 18-24 months, a good-quality, spacious home has been desirable.
“With owners seeking clean, fresh air and a space to roam around in, rural properties have seen a surge in demand post-lockdown, and are being snapped up, with a rise in the prevalence of homeworking reducing the need for homes to be located within commutable distance to city centre offices.
“The rural market has been further fuelled by buyers moving up from south of the border due to our house prices being comparatively lower than the south-east of England.
“Indeed, the rarely-spotted closing date has returned on occasion for high quality mid-market and rural houses.”
Shepherd’s Aberdeen office managing partner also noted the city bypass had been fully open for nearly three years, so homes which may not have been as commutable before its construction were now selling well – with increased demand evident in locations such as Ellon and Stonehaven.
But he said flat sales had continued to struggle in comparison to houses, with an oversupply still attributed to the oil price crash of 2014-16 and changes to buy-to-let mortgage tax relief, as well as perceived struggles with city centre living amid the pandemic.
Mr Dunne added: “Many first-time buyers have bypassed city centre flats in favour of competitively-priced suburban houses.
“Investors have, however, come into the city to buy cheaply-priced flats to add to their portfolios.”
Higher oil prices have given confidence to businesses in the north-east oil and gas sector and stability to the local housing market, he said.
But exploration for new reserves offshore is still necessary to continue to give confidence and growth to the property sector, he added.
Fierce debate
He went on: “We are currently in an energy crisis and the lack of Scottish Government support for the oil and gas sector is saddening, particularly around the proposed Cambo development.”
A study out just last month suggested more than one-third of voters think the SNP-Green coalition will have a negative impact on the north-east.
The findings follow months of fierce debate around the security of North Sea oil and gas jobs since the agreement between the SNP and Greens was signed last year.
First Minister Nicola Sturgeon has said the Cambo oilfield west of Shetland “should not get the green light” –Â Â sparking a political fight about the region’s economic future.
Many first-time buyers have bypassed city centre flats in favour of competitively-priced suburban houses.”
Stuart Dunne, Shepherd Chartered Surveyors.
As regards prospects for the north-east property market in 2022, Mr Dunne said he expected a similar picture to last year.
He added: “Well-presented homes in walk-in condition, with gardens and office/study space will continue to be popular, with many purchasers having no appetite to refurbish properties.
“With the trend of homeworking likely to continue, larger homes with study/office space will continue to be popular – though a potential return to office working or partial office working for some may dampen the rural markets as purchasers choose more commutable properties.
‘Encouraging signs’
“There are some encouraging signs emerging for the recovery of the flatted market, with recently-converted, new-build and well-presented flats attracting good levels of demand – both for sale and rental.
“Furthermore, with students starting to return and the cost of flats being cheap in comparison to other cities, city-centre flats are becoming an attractive purchase or investment opportunity.”
Breathing new life into Aberdeen city centre
Major regeneration of Aberdeen’s city centre and beachfront was given the go-ahead at a city council committee meeting last November.
Projects include the pedestrianisation of central Union Street, the creation of a new city market and the revitalisation of the beach area.
There are plans for a new pier, green “hub” and sports area which could include a new stadium for Aberdeen FC.
The council’s city growth and resources committee convener, Ryan Houghton, said: “Exciting changes are happening in Aberdeen and they are a hugely ambitious statement of intent.
“These multimillion-pound projects will create a more vibrant and people-friendly city centre, with a fantastic new feature in the new Aberdeen market – as well as create an open and more accessible beachfront with new facilities.
“The plans will not only act to heal Aberdeen from the economic damage inflicted by Covid-19 by breathing new life into our city centre, but they will also boost job creation and promote a wealth of opportunities to allow businesses and traders to thrive.”
Council leader Jenny Laing said: “These projects are truly transformative for the city centre and the beach area, and show the depth and breadth of our ambition.
“They will bring real, positive change for the people of Aberdeen, and we look forward to hearing updates in the months to come.”
These plans are only the beginning of a process that we envisage will turn Aberdeen into a city that not only residents of the north-east but indeed the whole of Scotland will be proud of.”
Jenny Laing, leader, Aberdeen City Council.
She added: “We have listened to the very businesses we are trying to help who have said we need to do these works to ensure these areas are attractive places to go to and spend time in.
“These plans are only the beginning of a process that we envisage will turn Aberdeen into a city that not only residents of the north-east but indeed the whole of Scotland will be proud of.”
See the Press and Journal’s own house price tracker including the “Irn Bru” scale of affordability here.