Estate agents operating in Aberdeen and surrounding areas have given their predictions of whether property prices will rise or fall in 2024.
The Aberdeen housing market saw activity lessen throughout 2023.
Higher mortgage costs, the cost of living crisis and an uncertain economic outlook all had an impact.
But what does 2024 hold?
Savills has predicted a 4% fall in 2024 while Northwood estimates a 1-2% rise in prices.
We asked local property experts working in Aberdeen and the surrounding area for their predictions.
Richard Shepherd – Gilson Gray
Prediction: Prices up 1-2%
“Inflation has begun to cool in recent updates, which is usually a good sign that interest rates may have peaked – albeit, you can’t rule out a further increase from the Bank of England before it starts to cut.
“The general consensus seems to be that a rate in the region of 5% will be the new normal and the days of ultra-low interest rates will be consigned to history.
“The interest rate environment inevitably has a significant effect on property. As such, we expect to see a more balanced market, where sellers and purchasers can undertake transactions with greater confidence.
“That may mean a slow and steady start to 2024, with demand rising in the spring, supported by increases to both the supply of and demand for homes as mortgages become more affordable.
“Aberdeen has already seen a fall in values from a level that was arguably unsustainable, so we do not expect to see the same price drops that have been predicted for other parts of the country.
“The market may remain a little patchy, but it should be supported by a relatively high oil price and a more settled economic backdrop.
“I predict a 1-2% rise across all property types in the year ahead.”
Lorna Coutts – ASPC
Prediction: Levelling off by end of year
“The Aberdeen property market is often, due to its links with oil, at odds with the rest of the country. That’s not necessarily what’s happening at the moment when comparing our market to national figures. I feel that we’re still in a period of lower confidence, albeit improved on where we were a year ago.
“There are economic factors at play, as well as uncertainty on the global stage with the Russia-Ukraine and Gaza-Israel conflicts.
“The rate of inflation is slowing, and Bank of England base rates have been held since August – these are promising indicators that things are set to improve.
“I feel that the first quarter, perhaps even the second quarter of 2024 will be akin to the market we’ve seen in 2023.
“This year has seen a slight reduction in properties coming to the market; sales have held up reasonably well set against the economic and political backdrop.
“If predictions are correct, by the second quarter of 2024 we will see lower interest rates and with that, increased buyer activity.
“Following a slower start, perhaps with a percentage or two drop off, I think there will be a stronger end to the year and prices will have levelled off.”
Faisal Choudhry – Savills
Prediction: Prices down 4%
“In recent months, mortgage rates seem to have peaked with inflation on its way down. However, with the Bank of England Base Rate expected to remain at an elevated level well into 2024, affordability will be stretched.
“Available stock across Scotland continues to lag pre-pandemic levels and that will keep upward pressure on prices.
“However, high stock levels in Aberdeen continue to suppress house prices. The average monthly house price in Aberdeen City fell by 6% in 2023.
“I expect continued sensitivity in the Aberdeen area, with house prices to drop by 4% in 2024.
“Areas with good transport links will perform relatively better and price adjustments in Aberdeen’s prime market will be less severe as it is less dependent on mortgage lending.
“Looking further ahead, whilst the economy is expected to recover from 2024, growth will be subdued especially in Aberdeen, where the oil and gas sector, upon which 10% of Aberdeen’s economy is dependent, is likely to shrink going forward.
“Consequently, whilst Scottish house prices are forecasted to grow by 20.2% over the next five years, in Aberdeen that figure is likely to be around 2.4%.”
Alan Cumming – Aberdein & Considine
Prediction: Slightly better than 2023
“The city market has seen a positive upturn in terms of viewing and offer activity which we expect to continue into early 2024.
“Sale and purchase activity on family homes, which reflects the market in a number of the suburbs in and around Aberdeen City, has been slower throughout 2023 really down to the uncertainty with interest rates.
“There is certainly a fair bit of pent-up demand from home movers who have been sitting tight this year and with inflation coming down and rates beginning to steady, and predicted to fall slightly over the course of next year, I can see the north-east market performing slightly better compared to this year.”
Laura Mearns and Ali Clark – Northwood
Prediction – Prices up 1-2%
“Compared to other areas, the Aberdeen sales market has – on the whole – bucked the trend with prices in both city and shire increasing over the last 12 months rather than dipping.
“We anticipate a surge of properties for sale in spring as many of the buyers and sellers who have sat tight watching in the market and mortgage rates in 2023, ready themselves to take the next step in the new year.
“Within this time, first-time buyers have saved a bit more, families have grown and the mortgage and interest rates have settled, becoming the new norm.
“We anticipate that this will create a slight increase in the local market house values in 2024 and we expect a 1-2% increase in values as a whole.
“Properties in modern and read-to-move-in condition are the most sought after from first-time buyers and buyers that are upsizing, and they achieve a higher sales price compared to those that need upgraded.”
Anne Littlejohn – Raeburn Christie Clark & Wallace
Prediction – Prices up 1-2%
“Aberdeen has already seen some price adjustments over the last couple of years and it is not anticipated that there will be any major reductions on value.
“Despite interest rate situations and larger economic pressures, the north-east does seem to be coping well enough with their residential property sales.
“Although volumes are down a little on last year and price pressures at the lower end of the market continue, where there is an abundance of flats, prices have generally remained stable in the middle sector of the market.
“Clearly with supply out-running demand, it has become a buyer’s market and the quality of product is guiding buyer sentiment. If there is good advice to be given to a client, it is to make sure that the property they intend selling is in good condition.
“Our view is that, whilst the first half of 2024 will remain stable, we would be looking for the second half of the year, when interest rates hopefully reduce, to start to show increased volumes of sales and also prices.”
