Mainstream Market

Aberdeen City and Aberdeenshire are leading the Scottish mainstream market. Prices and transactions are 25% and 4% higher respectively than the 10 year annual average. This compares with 11% and -8% across Scotland as a whole (see Graph 1).

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Despite high prices, buying a property remains the preferred option given the phenomenal rise in rental price across Aberdeen. At £1,066 per calendar month, the average monthly rental is 45% above the Scottish average, according to Citylets.

Following double-digit annual sales growth in the previous four quarters, which averaged 23%, there are signs that the rate of growth in the mortgage-dependent mainstream Scottish housing market is beginning to level off. Growth was restricted to 9% during 2013Q3. Mortgage approvals for the UK also fell by 9% during September, which is the first annual drop since January 2013. This can be attributed to the Mortgage Market Review (MMR), which commenced in April 2014, resulting in tighter affordability checks.

"The number of new build housing completions across Aberdeen City increased by 17%"

Whereas the number of residential transactions across Aberdeen City increased by only 4% annually due to diminishing supply and affordability issues, there has been a resulting 20% rise in neighbouring Aberdeenshire.

The number of new build housing completions across Aberdeen City increased by 17%. However, this is almost 60% lower than the 1,400 extra new homes required each year over the next decade, according to the Scottish Government. There is a contrasting picture in Aberdeenshire, where 1,064 were built during 2013, broadly matching Government aspirations.

Restricted development across Aberdeen has fuelled new build prices. At an average of £282 per square foot/£3,037 per square metre, prices for new build properties are some of the highest in Scotland (see Table 2). Most sites are witnessing a high rate of sale, with new releases of properties often selling out on launch day.

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The planned improvement in local connectivity is further enhancing market confidence within the Aberdeenshire development sector. Examples of this are Chapelton, which is notable for its scale, and ambitious plans for 230 high specification homes at Ury Estate, Stonehaven which includes more than 50 homes aimed at the top end of the prime market.

Taken from:
Spotlight: Aberdeen Area Residential Market