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Aberdeen Property Market Projected to Fall Unless Oil Price Picks Up

Posted by Aliza Xandria Arellano on Dec 22, 2015 12:46 PM EST
2015 General Election - Economy more big
ABERDEEN, SCOTLAND - FEBRUARY 23: A general view of Aberdeen harbour on February 23, 205 in Aberdeen, Scotland. Aberdeen City council has recently expressed its concerns over the North Sea oil industry which is struggling under plummeting oil prices. (Photo : Jeff J Mitchell/Getty Images)

It does not bode well for Aberdeen's property market unless the oil price picks up for the region. It's projected that the property market will fall unless the economy of the oil industry gains momentum.

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According to a recent report from PropertyWire, "Aberdeen has seen some of the strongest growth in the residential real estate market in recent years but now it is under a period of adjustment after seven years of phenomenal growth because the residential market across the Aberdeen area is being affected by uncertainty within the oil dependent local economy and prices have started falling."

The same post also mentioned, "According to the report from real estate firm Savills in the 12 months to the end of September 2015, the overall average sale price in Aberdeenshire was the second highest in Scotland, behind Edinburgh, while the average price in Aberdeen City was the fourth highest, behind East Renfrewshire, over the same period."

Moreover, it appeared that the oil dependent local economy of Aberdeen needs to implement strategies to counter the falling prices of oil and aid the struggling real estate economy. Furthermore, a fall of 2 percent in Aberdeen City and 4 percent in Aberdeenshire were recorded in the mainstream prices during the third quarter of 2015, compared to the same period last year.

At the same time, prime values in the Aberdeen area have dropped by 9 percent over the same period, with properties in rural locations most affected compared to city locations, as further stated in a report by Gaspark.

The same article explained that the major brunt has been felt in the volume of sales, and during the year ending September 2015 record, the number of residential sales in Aberdeen City and Aberdeenshire fell by 5 percent and 11 percent in comparison to the figures of last year.

Meanwhile, Faisal Choudhry, Director of Savills Scottish Research, said, "Despite these drops, there are some sections of the market that have bucked the trend, and these include properties between £300,000 to £400,000, which have seen a slight annual increase in sales of 5 percent."

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