Savills Portugal

The property market in Aberdeen and surrounding areas is often an exception to the rule: it is fair to say it can run counter-cyclically to the rest of the UK, linked as it is to a local economy largely driven by the fortunes of the energy sector.

The latest research from Savills shows that the Aberdeen city and Aberdeenshire residential markets have both experienced an uptick in activity in recent months, though they have performed somewhat differently from each other since the pandemic.

According to the official UK Government House Price Index, the average price in Aberdeen City has remained stable, sitting at around £147,000 in June this year. However in Aberdeenshire it was £207,261 which was 9 per cent higher than June 2019 and 2 per cent higher than the oil and gas-led peak of the market in 2013/2014.

The recent growth we have seen in the Aberdeenshire market can be explained by a number of factors: Scotland as a whole is very much in favour around the world as a place to live, indeed it is currently the most searched for term on Savills website.

Value for money, the quest for both more space both inside and out and a better quality of life, along with new patterns of hybrid working including super-commuting to London, have all fuelled demand for properties, particularly in scenic and more remote locations like Aberdeenshire.

Further, the Aberdeen Western Peripheral Route, completed a year before the beginning of the pandemic, has made some Aberdeenshire locations more accessible to the city, increasing their desirability. In addition, the new build market in these locations, which has often been supported by housebuilder incentives, has seen a marked improvement in sales.

While we have not seen the same growth in the Aberdeen city market, it is certainly more active than it has been for some time, particularly for properties below £700,000. The number of residential transactions in the city itself rose to 4,978 between July 2021 and June 2022, which is 29 per cent more than the pre-pandemic period. And there has been price growth in evergreen city suburbs such as West End, Cults, Bieldside and Milltimber, which are anchored by high-performing schools.

New build sites in some parts of the city centre, with placemaking and green credentials at their heart, are also performing well.

The million pound-plus market across the entire region is small but is predicted to expand in line with the wider local economy over the next five years, driven by the expanding energy sector. Meanwhile there were 15 top-end transactions between July 2021 and June 2022, the highest annual number since 2015.

With its high-quality workmanship and beautiful parkland setting, Dalhebity in highly sought-after Bieldside is currently Scotland’s most expensive residential listing. More than 55,000 people worldwide have viewed it on Savills website. Indeed, over 30 per cent of buyers are based abroad as its £7.5 million price tag represents value for money compared with many international locations including London, where the average price per square foot for prime property is £1,500, compared with £247 for Dalhebity.

The uptick in both transaction numbers and prices achieved for homes in Aberdeen and Aberdeenshire, fuelled by the pandemic-led race for space, is having a positive impact on developer and investor sentiment too. In a local economy where growth is fuelled by oil price rises, and where the transition to renewables is also escalating, confidence continues to build: renewed interest in the residential land market is now coming from a number of the key national housebuilders who have not been active here since the energy market downturn of 2014.