New figures released by Aberdeen Solicitors Property Centre (ASPC) show property prices in the city have fallen by 3.1% over the past 12 months.

This equates to a drop of more than £9,000 on a house valued at £300,000.

ASPC chairman John MacRae said a downward trend in interest rates, reduced rate fixed terms and falling inflation is all playing its part.

However there is optimism among property experts that the oil and gas industry will  result in “greater activity” in the housing market.

Despite the annual drop, there has been a small 0.5% increase in prices in the three months.

‘Prices likely to increase’

David Alexander, chief executive officer of property agent DJ Alexander, said prices have been static in Aberdeen for several years due to the high number for sale.

However, there are signs the number of properties for sale is reducing.

He believes greater investment in the oil and gas industry will result in new jobs being created which, in turn, will filter through into the wider economy.

He said: “The last year has seen property volumes fall by 9% comparing January 2024 with January 2023.

“There are still 2,352 properties advertised for sale but this is a step in the right direction as demand increases and starts to reduce the level of supply.

“I think there is cause for optimism in the coming year as more jobs and investment in the north-east translates into greater activity in the housing market resulting in faster sales and rising prices.”

‘Migraine for owners and sellers’

A total of 993 properties were sold through ASPC between October to December. In terms of transactions, this is down 15.6% compared to a year ago.

In Aberdeen, the price of a typical flat in £121,506, a semi-detached property £190,609 and a detached homes £323,237.

Mr MacRae said: “I think the worst may be behind us. We are now entering a phase where mortgage lenders are more optimistic regarding a downward trend in interest rates and are offering reduced rate fixed terms. Inflation does seem set to reduce even further.

“It is a mixed picture, but the prospects do appear to be moving a little towards a more acceptable position.”

Faisal Choudry, Savills head of residential research in Scotland, said: “The wider market is likely to bottom out mid-way through 2024 with mortgage rates gently reducing and affordability improving.

“In Aberdeen, the continued contraction of the oil and gas sector will impact local economic growth.

“However, the professional, science, tech and health sectors of the north-east are anticipated to grow over the next decade, supporting values.”

Surrounding areas overall improved

There was a mixed picture across the north-east in terms of house prices from Q3 to Q4 last year.

• Inverurie saw the average price of a detached home increase from £315,824 to £319,188 and semi-detached properties rose from £180,581 to £182,411. Flats decreased from £128,924 to £127,944.
• Prices in Stonehaven have overall improved, with the average flat increasing from £130,492 to £131,388 while semi-detached properties rose from £176,725 to £178,783 and detached homes increased from £315,400 to £325,599.

• Figures in Ellon show the detached market increasing from £269,094 to £274,278  semi-detached rose from £ 160,983 to £166,017 and flats decreasing from £97,943 to £97,153.
• Properties classed as countryside showed both increases and decrease – the average price for flats went from £119,110 to £117,480, semi-detached homes £185,271 to £186,932 and detached houses £341,433 to £346,544.