As with any other city, different trends and factors influence Aberdeen’s property market, whether for better or for worse.
In this article, we’ll provide an overview of these.
This should help you decide whether or not to invest in Aberdeen and, if you’re already invested, what you can expect going forward.
Brief overview of Aberdeen’s property market
In short, Aberdeen’s property market is turbulent.
Many other UK cities report higher and higher house prices, but this isn’t the case in Aberdeen.
In fact, recent news indicates that it is one of the areas with the highest concentration of house price drops.
While this might be good for those looking to buy a home in Aberdeen, it’s different for homeowners.
Let’s look closer at the city’s background to try and understand more about what’s going on…
Background of Aberdeen City
People have settled in Aberdeen for thousands of years.
From the 12th century onwards, it was a town. It officially became a city in 1891.
Current and projected population trends
Between 1931 and 1971, the population in Aberdeen exploded. It rose by 40,000 to around 211,259 people.
The discovery of oil in the North Sea in 1967 was a massive factor.
Today, it’s estimated that Aberdeen City’s population will increase to 230,170 by 2028.
However, this is only a 1.1% increase from 2018. Other cities report vastly higher estimated population projections.
Impact of oil prices on Aberdeen’s property market
The main reason is that Aberdeen was and still is heavily reliant on the oil and energy industry.
So, while other cities offer other industries attractive employment opportunities, Aberdeen’s remains relatively uncertain.
The effects of oil prices have certainly impacted Aberdeen’s property market.
Academics have gone as far as to say that Aberdeen’s property market holds the clue for oil prices. Here’s why:
Relationship between oil prices and property market
Most of Aberdeen’s population is linked to the oil industry, so their professional fortunes trickle down into other aspects of their lives.
Houses are commonly the most significant purchase a person makes in their lifetime.
They will usually leave no stone unturned if it means they can purchase their dream house or take part in an investment opportunity. The only issue is how much they can afford to invest.
This is where the oil industry comes into play. As oil prices increase, so do the profits of the businesses.
This means they’re able to pay more for promotions and hiring. These employees can then spend more on local housing, which results in higher demand and market value.
Fluctuations in property prices due to the oil industry
As you may have realised, the local property market is susceptible to changes in the oil industry.
In fact, between 2014 and 2018, there was considerable uncertainty about oil, which directly affected the local property market.
Aberdeen’s house prices dropped by 17% as many in the industry lost their jobs and began selling their properties to move elsewhere.
However, it could be a different story if other industries were in the area to reduce the overall effect.
Aberdeen City has been working hard to diversify, especially in the energy sector.
Different industries, like education, with globally recognised universities, play their part.
However, the energy and oil industry is still the largest, making it difficult for other industries to catch up.
Housing market trends in Aberdeen
Let’s take a look at the housing market trends that are currently affecting the local area:
The current state of the housing market in Aberdeen
At the end of 2023, house prices in Aberdeen had dropped by 3.1%. House prices by the type of property by the end of the year were:
- Detached House Price Q4 2023: £323,237
- Semi-detached House Price Q4 2023: £190,609
- Flats Price Q4 2023: £121,506
Now, let’s compare that to today after another quarter has passed. Here are the current asking prices for properties currently on the market in Aberdeen (at the time of writing):
- Detached House Price May 2024: £437,365
- Semi-detached House Price May 2024: £233,946
- Flats Price May 2024: £114,821
As you can see, those looking to sell their property today have much higher asking prices for detached and semi-detached properties.
On the other hand, flat prices continue to drop, and over 1,000 flats are currently listed for sale.
Sales trends in residential markets
The most significant sales trend affecting Aberdeen’s local property market timing. Just take a look at how long properties in Aberdeen remain on the market:
- Flat: 630 days
- Terraced: 283 days
- Semi-detached: 226 days
- Detached: 225 days
Properties in Aberdeen should listed and ready for sale months ahead of time.
Average house price in Aberdeen
According to Zoopla, the average price of property sold in Aberdeen over the last 12 months is £191,286.
While property prices dropped across the UK, the average was £285,000 at the end of last year. This makes properties in Aberdeen almost £100,000 cheaper than the national average.
So, this is definitely good news for buyers, while for sellers, it makes it increasingly difficult to get the highest price for their property.
Rental prices in Aberdeen
If you’re looking to invest in a property in Aberdeen as a buy-to-let, here’s what you can expect in terms of rental income:
Average rental prices for different types of properties
At the time of writing, here are the current average rental prices by number of rooms:
- One bedroom: £569 pcm
- Two bedrooms: £827 pcm
- Three bedrooms: £1,215 pcm
- Four bedrooms: £1,900 pcm
Or, to make it more transparent, here it is by property type:
- Flat: £852 pcm
- House: £1,585 pcm
How does this compare to national averages? Zoopla states that the average rent in the UK is around £1223.
While Aberdeen gets less footfall than other major cities, there is still demand for rental properties.
This usually comes in the way of students, as Aberdeen is home to two large universities (the University of Aberdeen and Robert Gordon University).
Final thoughts
External factors like the oil industry heavily affect Aberdeen’s property market.
This has definitely affected property prices in recent times, with many now worth less than they were.
The other major issue this creates is that some buyers are hesitant to make a purchase if their investment drops in value.
Sellers may have to endure a long, drawn-out selling process. However, we can help.
As cash house buyers who operate in Aberdeen, we can offer your property based on its current market value.
We can offer a free cash offer in as little as 24 hours. We can then complete the sale according to your timeframe. Get in touch to find out more.
