City property prices drop despite ‘delicate’ oil recovery

Aberdeen news
falling investment: House prices in Aberdeen have fallen in four out of the last five quarters, but there may be signs of a recovery

Scottish property prices are growing at their fastest rate in three years – but continue to fall in Aberdeen despite the improving local economy.

The average price of a Scottish home rose to £166,075 during the first quarter of the year – up almost £11,000 on the same time last year, according to independent research carried out by Aberdein Considine.

The estate and letting agent’s Property Monitor report, the most detailed analysis of Scotland’s housing market, shows a fifth consecutive quarter of growth nationally and the 7% rise between January and March this year is the biggest jump in prices since the first quarter of 2015.

However, prices dropped 1.3% in the Granite City during the first quarter and despite being almost 15% above the national average, have now fallen in four out of the last five quarters.

The picture is better in neighbouring Aber-deenshire, where prices rose 4.9% to £215,537, the second consecutive quarter of improvement for the region.

Robert Fraser, senior property partner at Aberdein Considine, said that behind the negative figures there was improvement in the north-east market.

“Although the city maintained its position as the seventh most expensive place to buy a home in Scotland, we saw year on year declines across all measures, including a further 1.3% reduction in average prices,” he said.

“Sale volumes were down 4.9%, with the value of properties changing hands also falling 5.4%, hitting £133,364,945 for the quarter.

“The statistics don’t tell the whole story and there is undoubtedly room for optimism. Much more so than last year. For a start, the delicate positivity at the end of 2017 within the oil and gas industry has begun to turn into something of a solid upturn. With oil prices not far off $80 a barrel and predictions that it could hit $100 over the next 18 months, investments in the sector become more likely than not.

“In addition, with £5 billion of public and private infrastructure due to be delivered before 2030 and the possibility of some 40,000 new jobs being created on the UK Continental Shelf over the next 20 years, confidence and ambition are not in short supply.

“The first two months of the year saw prices hitting £183,000 and £187,000 respectively. However, average prices rebounded with a force in March, hitting £201,190.”

Mr Fraser said sales at the top end of the market in both Aberdeen and Aberdeenshire have started to pick-up – a trend repeated throughout the country.