House prices in Aberdeen have dropped further than anywhere else in Scotland over the last year, but experts say this could provide the perfect opportunity for first-time buyers.
Figures released by the UK government yesterday show the average cost of a home north of the border increased by 8.4%, to £163,000, between the end of 2019 and December 2020.
But Aberdeen was one of just three council areas where the price fell during the year – dropping 2.1%.
The others were the Orkney and Western Isles, where sale numbers have been too low to meaningfully compare.
Elsewhere there was a 1.6% increase in Aberdeenshire, a hike of 5.3% in the Highlands and an 8.5% jump in Moray.
Chris Comfort, a partner with north-east property firm Aberdein Considine, said the news is not as bad as it first appears.
“Aberdeen exists within its own micro-climate with property, and has done related to the oil and gas sector for a number of years.
“And these figures are actually quite positive as, if you look back, this 2.1% is less of a decrease than we’ve seen in the last three years.
“We’re seeing property prices starting to level out.”
The council area with the largest increase in price over the year was East Ayrshire, which soared by 17.9%.
Registers of Scotland, the body responsible for keeping track of the country’s land, property and legal documents, said the house price change is the largest for almost six years.
Accountable officer Janet Egdell said part of this may be linked to the sector-wide shutdown introduced when the coronavirus pandemic first hit.
She said: “The annual price change of a property in Scotland of 8.4% from December 2019 to December 2020 is the largest increase reported in the UK HPI since March 2015.
“While this increase may have been influenced by the unusual pattern of transactions resulting from Covid-19 restrictions, we will track to see whether this is a trend that continues in the coming months.”
Mr Comfort said the areas where prices are “booming” are also experiencing a shortage of stock.
This has led to estate agents setting closing dates and buyers making inflated bids for property as they compete with sometimes dozens of others.
In December, the average property price for Aberdeen was £142,600 – down from £145,700 at the end of 2019.
This figure combines all types of housing, however, which could have a bearing on the statistics.
He said: “In Aberdeen particularly the flat market is well-supplied and that’s outstripping the demand.
“I think, with lockdown, folk want to have their own house and garden rather than a flat with shared areas, communal hallways and a lack of private garden.
“I’m positive the flat market could be described as over-supplied just now – and that doesn’t translate in the same way to average house prices.”
Mr Comfort added: “Now is a good time for first-time buyers to get onto the property ladder.
“Interest rates and mortgage rates are at a lower level for them than their parents would have seen, so in terms of affordability and saving for a deposit we’re seeing a lot of buyers saving enough.
“And they’ve not been able to spend as much money on clothes and alcohol and holidays – I think a lot have concentrated on their finances a lot more than they might have otherwise.
“So we will have many more first-time buyers getting into position.
“In the north-east particularly, average sale prices have been lower so deposits are lower too.
“They’re not going to have to pay 15-20% over the advertised price like you would in Edinburgh or Glasgow just now.”