The Aberdeen property market is bearing up surprisingly well in the oil downturn, despite more houses sitting on the market and rents dropping by over £100 per month, say property experts.
Latest figures from the Aberdeen Solicitors Property Centre reveal a 13% drop in the number of houses being sold in 2015 and 2013.
In 2015 of the 8,720 properties put on the market through ASPC, only 6,572 were sold. In 2013 – when the oil price was hovering around £100 per barrel – of the 7,478 on the market, just two failed to sell.
ASPC chairman John MacRae said: “In 2015 we saw an increase in supply and a decrease in demand. Clearly, the market is feeling the effects of the economic difficulties we are having in the wider economy.”
“In 2015 we saw people being laid off and it’s likely some people may be having to sell.
“Properties are taking longer to sell. Sellers will have to take advice on how best to market their properties and will have to be realistic about the prices they can expect.”
MacRae said: “The market is still healthy, particularly for smaller properties. Most of us who have been in Aberdeen for a number of years will have seen the market go through cycles. The current situation is certainly nothing like the mid-80s or early 90s.”
City law firm Aberdein Considine sold more than 2,100 properties in the north east in 2015. The firm’s leasing director Adrian Sangster said that a 15.4% drop in rents had prompted a surge in the rental market.
“2016 has got off to an absolute flier. Rent levels have come down during the last quarter by more than 15% on same period in 2014 and that has stimulated interest.
“The changes in the North Sea have impacted on the prices and void periods are longer, but going on the first three weeks of the year, I’ve been surpised. However, it’s too early to say how long this will last.”
The most recent report from Scottish letting specialist Citylets for the fourth quarter of 2015 stated: “Aberdeen’s downward curve has steepened and falls are almost certain to continue throughout 2016 and beyond. Average rents are now £934 per month with average time to let lengthening to 46 days.”
The average price of a rented property had dropped from £1,110 in 2014 to £934 in the last three months of 2015.
Matt Pullinger, director of Northwood Aberdeen said: “Properties that are marketed well, priced competitively and maintained to a high standard are moving well and seeing good demand.
“Other areas of the market have seen increased times to let and larger properties are seeing some noticeable falls in average price per bedroom. The key remains to stand out from the rest with lots of choice available for tenants.”
Sangster said he was aware people had sold properties and chose to rent whilst sitting out the uncertainty caused by thousands of redundancies in the oil and gas industry.
“It’s clear that some are happier to rent until the economy stabilises before making a commitment to buying a new property.
“I don’t think rent levels are going to go up anytime soon, but if they can remain at current levels I think that’s fair. The market couldn’t sustain the increases of the past few years.
“If people have been laid off they may be getting by on savings or insurance which enables them to meet their payments, but as time goes on, that may change but it’s really too early to say.”