Research article

North East’s gentle recovery

The Granite City is beginning to show its silver lining, while prices are on the rise elsewhere

Market recovery across the Aberdeen area has continued throughout 2017. Aberdeen City and Aberdeenshire’s average house prices settled around the £190,000 and £220,000 level respectively during the second half of 2017. Both figures are 15% and 8% below the peak during 2015.

Figure 4

FIGURE 4Average monthly house price in North East Scotland

Source: kamaco Repeat Sales Index

An increase in transactions

While house prices are beginning to settle, the number of transactions increased by 3%, from 8,017 in 2016 to 8,218 in 2017. This is the first annual increase since 2014, when the number reached 11,072 during the height of the energy market. Market recovery has taken place up to £800,000. Above this level, transactions have dropped but this was mainly due to lower levels of new build activity.

Suburban hotspots leading the recovery

Within Aberdeen City, the West End and the sought-after suburbs of Bieldside, Cults and Milltimber led the recovery during 2017, with a 21% annual rise in transactional activity.

In Aberdeenshire, the strongest growth in transactions last year took place in locations that are within easy reach of Aberdeen, including Portlethen and also the hotspot of Banchory.

Stock levels remain high

While transactions have started to recover, the number of available second hand residential properties stands at 4,830. This is lower than the number available at the end of last year, but more than double compared to March 2015. The majority of available stock is between £100,000 and £200,000 and includes many buy-to-let properties.

Prospects for long term recovery are good

Over a five-year period to 2022, we expect Aberdeen area values to increase by 4.5% reflecting the recent stability in average prices and improving transactional activity.

Dundee City prices reach record level

Dundee City, where the new V&A museum is due to open this year, saw a 6% increase in its average house price in December 2017, reaching £143,331. However, a lack of supply resulted in a slight drop of 1% in the number of residential transactions. Despite this, prime transactional activity above £400,000 reached its highest level in five years.

Ongoing investment boosts Angus

Increased prosperity in Dundee has led to further growth in the Angus residential market. The average house price increased annually by 3% last December reaching £166,607, which is the highest level in 16 years. The number of residential transactions increased by 5% during 2017, with improved activity between £200,000 and £400,000.

Moray prices rising but activity steady

In Moray, the average house price increased annually by 3% last December reaching £166,248, which is the highest level in 16 years. Overall transactional activity remained unchanged last year compared to 2016, however, there was improved activity above £300,000.

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Key contacts

Simon Smith

Simon Smith

Senior Director / Head of Research & Consultancy
Research & Consultancy

Two Exchange Square

+852 2842 4573


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