How Aberdeen house prices will change in 2018 - according to an expert

Industry experts expect Aberdeen's recently rocky property market to even out over the course of 2018 (Photo: Shutterstock)

Despite a recent dip in the market, Aberdeen remains the sixth most expensive place to buy property in Scotland.

A typical house in the area costs 25 per cent more than the national average, according to Aberdein Considine’s Property Monitor last spring.

So what does 2018 hold for the city’s fluctuating property market and buyer confidence?

The average price for property in Aberdeen stood at £221,546 in January 2018, according to PrimeLocation. This is a rise of 1.09 per cent since October 2017.

In terms of property types, flats in Aberdeen sold for an average of £157,112, and terraced houses for £212,332, according to the current Zoopla estimates.

An increase in buyer confidence

“We have seen an encouraging level of activity since the New Year," says Carol Crowther, Head of Residential Property at Stronachs LLP, an all-service law firm with headquarters in the city.

"While it’s too soon to predict whether this is the start of a sustained recovery, it seems fair to say that buyer confidence is increasing in Aberdeen."

Crowther believes a number of external factors are contributing to increased buyer confidence in Aberdeen.

These include ongoing investment in the city, such as “the construction of the new Aberdeen Exhibition and Conference Centre, the City Council backing Aberdeen FC’s plans for a new stadium and continuing progress on the long-awaited Aberdeen Western Peripheral Route (AWPR) project."

Another factor Crowther feels will have an impact on Aberdeen's property sales is the introduction of the new Private Residential Tenancy "which, in practice, provides benefits for landlords as well as tenants."

Aberdeen is the sixth most expensive place to buy property in Scotland (Photo: Shutterstock)

Good deals still exist - but be realistic

After a rocky few years, industry experts believe Aberdeen's property market looks set to even out in 2018.

“I think the 2018 property market in Aberdeen will remain stable with some fluctuations from time to time, but without the marked seasonal pattern we’ve become accustomed to,” says Crowther.

“That said, the market remains fragile, meaning that sellers should continue to be realistic in their expectations as to price and the time required to achieve a sale.

"Buyers can still expect to find a good deal if they shop around.”

Low house price growth in 2017

Reports last year suggested a sharp fall of up to 10 per cent in Aberdeen’s property prices.

Research by the peer-to-peer secured lending platform, Lendy, and the Land Registry in November 2017 found that the average house price in the Scottish city was £164,000 in June 2017, down from the £182,000 recorded in June 2016 when the EU referendum was held.

Aberdeen came bottom of the table when house price growth was measured across 381 local authorities throughout the UK.

Lendy believed that concerns over Scotland’s post-Brexit future - together with the pressure of low global oil prices on Aberdeen’s heavily oil-dependent economy - had seen demand for homes fall sharply.

Other Scottish cities revealed a different picture.

The average price of a home in Aberdeen rose to £200,832 during the third quarter of 2017 (Photo: Shutterstock)

A sharp contrast to the rest of Scotland

Research by Hometrack showed that Glasgow and Edinburgh had the fastest-growing house prices of all UK cities in 2017.

Property in Glasgow increased in value by 7.9 per cent in the 12 months to November 2017, with Edinburgh at 7.6 per cent, and sales in Scotland forecast to grow.

This is consistent with robust levels of price inflation currently being recorded in these cities and reports of a shortage of homes for sale, according to Hometrack.

However, not all of Scotland recorded such strong growth.

The Hometrack report showed that prices fell in Aberdeen by 7.7 per cent as the impact of sinking oil prices continued to affect the market.

Slow improvement

In the past year, house prices in Aberdeen were recorded at three per cent lower than the year before, and 33 per cent down on 2006, when they averaged at £293,955, according to Rightmove.

But the end of 2017 started to show tentative signs of recovery for Aberdeen’s property market.

Aberdein Considine’s Property Monitor revealed that the average price of a home in the city rose marginally - to £200,832 - during the third quarter of 2017.

The 0.1 per cent increase was the first year-on-year rise recorded since early 2015, when tens of thousands of jobs were starting to be cut from the region’s oil and gas industry.

The research – carried out in conjunction with Aberdeen and Grampian Chamber of Commerce – also revealed the second consecutive increase in sales in neighbouring Aberdeenshire, where transactions have jumped up 2.1 per cent and 5.7 per cent during the second and third quarters of 2017.