Residential property sales in Aberdeen and surrounding towns dipped in the final quarter of 2021, underlining concerns around potential interest rate and cost of living increases, according to a north east legal expert.
Figures released by the Aberdeen Solicitors Property Centre (ASPC) showed property prices in Aberdeen city fell by an average of 1.5 per cent compared to the previous quarter, while prices in Stonehaven and Ellon suffered a drop of 2.8 per cent and four per cent respectively.
The average price of a flat in Aberdeen fell from £129,970 to £127,889, semi-detached properties decreased from £192,173 to £189,253, while the largest fall was in the detached homes market, down from £324,212 to £317,653.
Joni Esson, managing director of legal, property and financial services specialist, Esson & Aberdein, said that while the figures were disappointing, her firm had been encouraged by a positive start to 2022.
She said: “Despite being noted as a generally quieter time in the northeast market, we are seeing very encouraging levels of activity in both the sale and purchase markets as well as our mortgage offering, with many looking to secure fixed rate products in anticipation of rate rises.
“The Q4 report echoes concerns that many of us share regarding interest rate volatility and the prospect of inflation rising to levels not seen for the best part of 20 years, not to mention the longer-term impact of the coronavirus pandemic.
“The fortunes of Aberdeen and Aberdeenshire has long been tied to the price of Brent crude oil and that still holds true today. While the transition from hydrocarbons to carbon net zero is underway, it remains to be seen how the energy industry will evolve and what impact that will have on the property market in the longer term.”
The Aberdeen Housing Market Report, compiled by the University of Aberdeen Business School, found that 1,482 residential properties were transacted in the final quarter of 2021, down 14.6 per cent compared to the previous quarter and down 6.8 per cent year-on-year.
The biggest decrease in transactional activity was in the detached homes category – down 26.6 per cent compared to the previous quarter and down 20.6 per cent compared to the same quarter in 2020.
In Ellon and Stonehaven, sales prices decreased across all three categories and despite its attractive seaside location and excellent transport links the largest price fall was in Stonehaven detached properties, down almost £14,000 from £322,705 to £308,763.
However, Inverurie flats increase in price by an average of £1,400 compared to the previous quarter, while detached properties slightly increased in value to an average of £299,404.
Ms Esson added: “Inverurie is an example of an area which is on the up and becoming more desirable, with a lot of investment and development. The report shows that the annual house price change in Aberdeen has been 1.7 per cent which is encouraging and based on interest levels and inquiries we have received in the first weeks of 2022 we are confident that positivity will be reflected in transactions completed in Q1 of 2022.”