Aberdeen Property Market Bounces back
The housing market that suffered badly because of the collapse in North Sea oil prices is now likely to rebound as the energy industry emerges from a downturn.
Research says buyers are now able to take advantage of lower property prices amid warnings that a new skills shortage could trigger a similar worker influx to the one which almost doubled average property values in the late 1980s and 1990s.
North Sea operators are also expected to generate a £10billion cash surplus this year - the highest figure achieved since 2010 when the industry was enjoying a boom.
It is also widely believed that the current market is the best property buyers have experienced in 20 years – saying that people can now get a two-bed flat for the same price as a one-bed in 2014.
Since the oil price crash of 2014/15, when the Brent Crude benchmark dropped to under $30, we have seen a gradual decline in average sale prices in both Aberdeen and Aberdeenshire.
So far this year, the average sale price in Aberdeen alone is £179,485, down around 15 per cent on the 2014 peak. However, with oil now sitting above $80 again – and suggestions that global events could push it higher – savvy buyers and investors are returning to the market in Aberdeen.
At the 2014 market peak, there were around 3,000 properties on the market at any time. That number sits at over 6,000 today, with a particular oversupply of city centre flats.
This has created a buyers’ market where properties are changing hands for below formal valuation prices in many cases.
While buyers across some parts of the UK will have a close eye on Brexit, it appears that the Aberdeen market’s rapid rebound from the global financial crash of 2008 proves that the Brent Crude price is “more important to the local economy and therefore local house prices.
The cost of producing oil is more than 50 per cent cheaper now than in 2014, and research suggests that 70 per cent of the undeveloped oil discoveries in the basin have break-even costs of less than $60 and are therefore profitable at today’s oil prices.