Aberdeen’s housing market has “stabilised” in the wake of the oil price collapse, although builder Cala Group said will wait for further proof that sales are improving before launching new sites.
Cala said it was still on track to reach a target of £1billion of sales across the UK by 2020, as it reported record turnover and profits in its most recent financial year.
The housebuilder’s pre-tax profits rose 18% to £60.1million in the year to the end of June 2016, while turnover rose 15% to £587.1million.
This was despite “headwinds” – including what it described as “challenging” market conditions in Aberdeen where it faced a slump in prices during the year.
It also struggled to sell houses worth over £1.25million in Scotland due to tax rises imposed through the Scottish Government’s Stamp Duty Land Tax (SDLT). However, Cala admitted sales at this price level were “relatively small” part of its annual sales. The company built 1,151 homes in the year – up 6% on 2015, at an average price of £538,000.
Alan Brown, chief executive, said the company would focus on sales at its sites in the north-east including Parklands off Westburn Road and at Cults, Milltimber and Bridge of Don before launching new developments.
The group also has applied for planning permissions for future projects in Bridge of Don and off the A90 Parkway.
He said: “The market has stabilised in Aberdeen – in fact it has been stable for us for a little while.
“We are quite pleased about that. We have a good business in Aberdeen – we are the number one house builder in the city. It is an area that is very close to our hearts.
“We have four points of sale up there at the moment – which is about the right size for us as a business in Aberdeen anyway.
“Our intention is to trade on that and start some new ones after that.”
He added: “We just want to see a bit more stability in the market for a little bit longer – we are obviously very keen to keep developing and growing that business.”
The firm, which was bought out in a deal worth £212million led by Patron Capital and insurance giant Legal & General in 2013, has some stringent growth targets.
It aims to ramp up the number of housing units built per year to between 2,000 and 2,500 in the coming years as well as hitting annual sales of £1billion.
Mr Brown said: “Although the target for £1billion looks high we know we have 88% of the land we need under our control already over that four year period.
“We have been building the business since 2013. Now we are seeing the results of all that hard work.”
Cala stands for City of Aberdeen Land Association and was founded in the north-east in 1875.
