Residential property - the only way is up
Recently released UK House Price Index data for December 2016 said average property prices in Aberdeen city fell by 9.8% compared with the same month in 2015: the biggest decrease Scotland-wide.
Together with a 3.5% drop for Aberdeenshire, you’d be forgiven for thinking there was little cause for optimism for the north east housing market.
Yet, I believe there is.
After a consistent decline in activity over the past three years - reflecting the challenging economic conditions in the north east - the residential property market has seen a steady start to 2017.
We’ve seen an upturn in activity in both sales and purchases; indeed some property professionals believe the market may have ‘bottomed out,’ particularly as we’re noticing a more encouraging upward trend in the oil price.
Looking at our own data for this year up to 22 February, compared with the same few weeks in 2016, we can see an increase of almost 18% in sales, and the average sales value has grown to around £242,000, compared with just over £209,000 12 months ago.
Even more encouragingly, these trends are consistent with the Aberdeen Solicitors Property Centre (ASPC) figures, suggesting there may indeed be cause for some confidence in an improvement in the market.
So are these small improvements, these marginal gains, likely to lead to a sustained recovery, or are they a flash in the pan?
Well, I believe it would be wrong to ignore and dismiss a degree of optimism.
There are certainly some encouraging signs that point towards recovery; however, the reality is that the market has a long way to go before it reaches – if ever – the ‘heady heights’ we saw in the pre-oil downturn.
While over the coming months properties may well begin to sell a little quicker, and for slightly better prices, it’s likely the north east residential housing market in 2017 will remain fairly static.
But let’s not forget that that prospect in itself is an excellent opportunity for some buyers, in particular those not waiting to sell their own property, to buy their ideal home at a more than realistic price.