New figures reveal “unusually good” levels of activity in the Aberdeen housing market, leading to property prices beginning to climb.
According to local experts, activity in the first quarter of the year is usually a good indicator of how the market is set to perform in the coming nine months and this year’s figures bring encouraging news.
The first quarter numbers show that nearly 25% more properties were bought and sold between January and March this year compared to the same period in 2020.
Prices too are looking positive, with the annual house price in Aberdeen and surrounding suburbs rising 5.4% year on year.
This is no doubt welcome news after the shaky year the north-east property market has faced since the coronavirus pandemic took hold last March.
Evidence that the north-east market was beginning to recover could be seen in the final quarter of 2020, when property sales began to pick up.
This has continued into 2021, with 1,282 dwellings sold in Q1.
John MacRae, chairman of the board of directors of ASPC, has called these signs “invigorating” and adds that March this year saw the highest volume of traffic ever recorded on aspc.co.uk, Aberdeen’s most well-known property site.
However he cautions against any rash action, and reiterated that we are not out of the woods just yet. After all, the annualised house price change over five years in Aberdeen is -3.4%.
He said: “The report released by the Centre for Real Estate Research at the University of Aberdeen Business School, for the first quarter of the year brings encouraging news.
“This year, we have a strong positive indicator on prices, the first in several years.
“The first quarter figures are always of interest because, by the end of March, we generally have a good indication how the market is likely to be during the year.
“The last quarter of 2020 had seen unusually good activity in our local housing market, leading to positive movements across two out of three categories. This was very welcome, given the year that we had endured. I recall endeavouring to dampen expectations for 2021. I was concerned not to raise hopes.
“It is invigorating, therefore, to see that results for the first quarter of this year continue to show improvement in our local housing market, albeit not yet of a comprehensive nature.
“Nevertheless, the first quarter results reinforce the anecdotal evidence of practitioners that we may be experiencing a recovery in our market.
“An additional sign of how our local market is doing is the increase in our website traffic. March this year has seen the highest ever traffic on aspc.co.uk.
“Compared to prices five years ago, our market remains down by 3.4%. Compared to the last quarter of 2020, it is down 0.4%. Compared to the same time last year our market has risen 5.4%. These figures require some context to help explain what I think is happening.
“Last year was ‘unusual.’ After a mildly encouraging start the local market was stopped in its tracks by lockdown, only to recover, strongly, later in the year. Understanding just how busy the market was, last autumn, allows the first quarter’s result of -0.4% to be seen in context, as essentially stable.
“Additionally, five years ago, the first quarter’s report for 2016, indicated the annual house price change was -4.9%. The current change is +5.4% Given the mediocre performance of our local market since 2014, this is a very hopeful sign.
“Finally, the annualised change (over five years) stands at -3.4%.
“What all this means, I think, is this: Despite a severe knockback to activity, last year, we saw evidence of increasing confidence, and increased activity, after lockdown was lifted.
“The activity was not of “boom time” proportions but was welcome. The first quarter of this year appears to be continuing at similar levels of activity and is also having an upward effect on price.
“Do bear in mind that we are in a recovery situation, prices are still, in the main, below the levels of 2014, but there are grounds for optimism that the recovery will continue.”
These figures have been compiled by Aberdeen Solicitors’ Property Centre Limited (ASPC), in cooperation with Aberdeen University Business School’s Centre for Real Estate Research, relating to the housing market in Aberdeen.