Known as the oil capital of the UK, Aberdeen is a prosperous city on Scotland’s north east coast and research from Savills shows that not only is the Aberdeen area residential property market continue to prosper, there is strong evidence of local market strength spilling out to the rest of the country.
‘Local buyers are not only investing in the Aberdeen area, but are now actively seeking homes in London, other second home locations, and as well as accommodation for their children in university towns all over the UK,’ said Faisal Choudhry, Savills head of research in Scotland.
‘The number of Aberdeen buyers, registering with Savills to purchase in other parts of the UK, has increased by 76% this year,’ he added.
According to the report, Aberdeen continues to attract new buyers to the city, including those relocating for employment in the energy markets, access to top quality educational facilities or a change of lifestyle.
‘Whilst local buyers dominate the prime Aberdeen area market, purchasers from outside Scotland currently make up 9% of prime transactions. International purchasers in the prime Aberdeen area market came from locations such as Scandinavia, the Middle East, Australia and the United States,’ said Choudhry.
The top end of the market, above a million pounds, is where the Aberdeen area has shown its best performance. Whilst Scottish transactions at this level fell by 22% over the last five years, activity above a million in the Aberdeen area increased from 44 to 87, a rise of 98%. The vast majority of sales in this price band take place in the upmarket residential areas of West End, Cults and Milltimber.
Residential transactions across the board in the local authority areas of Aberdeen City and Aberdeenshire increased by 13% this year compared to 10% for Scotland as a whole. These areas are leading the current housing market recovery, alongside other core locations in Scotland’s Central Belt.
Whilst the average price across Scotland as a whole has remained unchanged, the average transaction price across Aberdeen City and Aberdeenshire increased this year by 5% to around £204,000, which is 24% higher than the 10 year average.
Residential development market, land values in Aberdeen City have increased this year at double the rate of other Scottish cities due to the imbalance between supply and demand. At an average price of £276 per square foot, current new build property prices in Aberdeen City and surrounding areas are some of the highest in Scotland.
The reports points out that the imbalance between supply and demand has also led to Aberdeen City having some of the highest rental prices in Scotland at just over £1,000 per calendar month, which is 46% higher than the average for Scotland as whole.
‘We expect strong demand to support some of the larger residential developments planned in and around Aberdeen City in the coming years. We predict the residential market across the Aberdeen area to continue its impressive growth with values across the prime, mainstream and rental sectors forecasted to grow by 2.5%, 4.5% and 6% respectively over the course of 2014,’ Choudhry concluded.
