The Aberdeen House Prices & Rents thread

Generali

HAMISH_MCTAVISH wrote: »

Surely that's just a normal part of market forces...

For sales to take place you need to have both a willing and able buyer and also a willing and able seller.

The vast majority of vendors, even during times of recession, are not financially distressed. They don't need to sell, they might want to sell, but not at a price they aren't happy with. So if they can't get a price that's acceptable to them they'll remove from market.

It's certainly the pattern we saw in 2008.

If you want to price an illiquid asset then there are usually two possible prices: the price a buyer would pay and the price a seller would sell at and they almost certainly aren't the same thing.

This is pertinent at the moment as bond markets are looking both very ripe for a sell off and very illiquid.

Crashy_Time

HAMISH_MCTAVISH wrote: »

I was out around the town on Hogmanay and it was busy enough.

Aberdeen today, in the middle of a slump, is still far more lively and prosperous than many other similarly sized towns in the UK.

It's gone from mega-boom territory to just well-to-do territory.

As I say, I'll be delighted if prices do crash just now as it'd be very lucky for me, but unfortunately it's not very likely.

The NE has been pretty much "well to do" territory for 40 years, this downturn is just starting, get back to us in a year and tell us how much your house is worth.

Crashy_Time

fun4everyone wrote: »

Yeah that makes sense thanks. I am not on HPC (that is the truth I promise!) but I did go on there and look the other night as it is referenced on here so much. Specifically the Aberdeen thread. I also found the idea that there was a forum devoted to the idea there is going to be a house price crash hilarious in itself.

Fair enough. I do own property that I rent out. Yields in Aberdeen at the moment are terrible and supply FAR outstrips demand.

For what its worth I do believe house prices in Aberdeen would have rocketed specifically in 2014 but the independence referendum caused a significant wobble. Once that was history the falling oil price took over.

How did you find the idea of a sub-sub-forum that the site owners are embarrassed to have seen on their main board and that you have to log into to debate with about a dozen individuals hell bent on pretending to themselves that UK property is going to continue booming? :rotfl:

bjm81

Aberdeen - oil = Dundee
Or worse.

I work in the industry and know of decent folk paid off and struggled/struggling to find work.

Demand for rental property seems to have taken a big hit. £1200+/month properties now sub £1000. Some demand from students and AWPR workers but not at £1000/month.

If oil stays sub $50 this year and beyond then I don't think the Aberdeen/shire property market is going to hold up. 20 -30% falls wouldn't surprise me.

I've done alright with my property moves up till now but I'm now resigned to writing off a big chunk of equity.

Even if oil recovers I can't see boom times again but could be wrong. Maybe enough work to maintain the current trimmed workforce but not what it was the last few years.

Anyone buying property now at current prices in Aberdeen/shire needs to consider whether they can afford to write of £Ks.

Generali

bjm81 wrote: »

Aberdeen - oil = Dundee
Or worse.

I work in the industry and know of decent folk paid off and struggled/struggling to find work.

Demand for rental property seems to have taken a big hit. £1200+/month properties now sub £1000. Some demand from students and AWPR workers but not at £1000/month.

If oil stays sub $50 this year and beyond then I don't think the Aberdeen/shire property market is going to hold up. 20 -30% falls wouldn't surprise me.

I've done alright with my property moves up till now but I'm now resigned to writing off a big chunk of equity.

Even if oil recovers I can't see boom times again but could be wrong. Maybe enough work to maintain the current trimmed workforce but not what it was the last few years.

Anyone buying property now at current prices in Aberdeen/shire needs to consider whether they can afford to write of £Ks.

Oil is unlikely to see an inflation adjusted price above $50 for a very long time. The reason? Frackers in the US can increasingly get oil out of the ground for $40 and can set up new production very quickly. If the oil price got anywhere close to $50 then frackers will simply start a few more wells in Bakken.

HAMISH_MCTAVISH

bjm81 wrote: »

Aberdeen - oil = Dundee
Or worse..

Aberdeen many, many, many decades from now, after the last barrel is pumped from the UKCS, and after all the decommissioning work, and after all the specialist industry based here finally dies or moves away....

That Aberdeen - the one with just the regional government hub, the two World class universities, and the various other industries from agriculture to biotech - that Aberdeen without any remnants of an oil industry left at all - is the same as any other regional city in Scotland, Dundee, Perth, Stirling, Inverness, etc.

But the Aberdeen we have now and will continue to have over the next 30-50 years, the Aberdeen that has all the regional city stuff plus that still has a significant part of the oil industry it's had in the past, if not quite all of it.... This Aberdeen will continue to be well above the average in terms of prosperity and employment.

No, it won't be as good as it was in the boom years, but it also won't be anywhere near as bad as it would be with Zero oil industry at all.

The mistake some make is to assume that oil is an on/off switch - either 100% boom - or 0% contribution at all.

Aberdeen with 0% of an oil industry left at all is like Dundee.

But that's half a century away or more...

In the meantime there will be enough of an oil industry for many decades to come that it'll make a material contribution to the local economy, and keep Aberdeen prosperity and employment well ahead of the other regional cities like Dundee, Perth or Inverness.

Generali

HAMISH_MCTAVISH wrote: »

Aberdeen many, many, many decades from now, after the last barrel is pumped from the UKCS, and after all the decommissioning work, and after all the specialist industry based here finally dies or moves away....

That Aberdeen - the one with just the regional government hub, the two World class universities, and the various other industries from agriculture to biotech - that Aberdeen without any remnants of an oil industry left at all - is the same as any other regional city in Scotland, Dundee, Perth, Stirling, Inverness, etc.

But the Aberdeen we have now and will continue to have over the next 30-50 years, the Aberdeen that has all the regional city stuff plus that still has a significant part of the oil industry it's had in the past, if not quite all of it.... This Aberdeen will continue to be well above the average in terms of prosperity and employment.

No, it won't be as good as it was in the boom years, but it also won't be anywhere near as bad as it would be with Zero oil industry at all.

The mistake some make is to assume that oil is an on/off switch - either 100% boom - or 0% contribution at all.

Aberdeen with 0% of an oil industry left at all is like Dundee.

But that's half a century away or more...

In the meantime there will be enough of an oil industry for many decades to come that it'll make a material contribution to the local economy, and keep Aberdeen prosperity and employment well ahead of the other regional cities like Dundee, Perth or Inverness.

Dundee = hell hole. It holds the record for the earliest in the day I have ever seen someone arrested for being drunk and let's face it in the UK you can be absolutely smashed and not get arrested for it!

I suspect what will keep Aberdeen going is the oil service industry. There is no good reason for the City of London to have all the banks any more, the reason it does is because there is a critical mass of people within commuting distance that have the skills required to run investment banks. Similarly, I expect Aberdeen to be able to maintain an economy based on analogous network effects.

Unless the Scottish Government allows the oil industry to come onshore then I suspect that actually taking oil out of the ground in Scotland/Scottish waters has a pretty finite life, basically the life of the remaining rigs plus enough time for investors to realise that there is no future in drilling in the North Sea.

It's going to be a lousy time to be Norwegian!

HAMISH_MCTAVISH

Generali wrote: »

I suspect what will keep Aberdeen going is the oil service industry. There is no good reason for the City of London to have all the banks any more, the reason it does is because there is a critical mass of people within commuting distance that have the skills required to run investment banks. Similarly, I expect Aberdeen to be able to maintain an economy based on analogous network effects.

Absolutely.

And that would remain the case for some time even after all oil extraction ended.

But the reality is we're still decades away from all oil extraction ending.

The oil and gas industry will continue to be a significant economic benefit to Aberdeen for the next 30-50 years.

Maybe not as much of a benefit as it once was, (although I wouldn't bet against oil prices booming again at some point) but significantly more benefit than other regional cities in Scotland get from it, which is why talk of Aberdeen without any oil being like Dundee, Perth or Inverness is probably correct - but also half a century premature.

Generali

HAMISH_MCTAVISH wrote: »

Absolutely.

And that would remain the case for some time even after all oil extraction ended.

But the reality is we're still decades away from all oil extraction ending.

The oil and gas industry will continue to be a significant economic benefit to Aberdeen for the next 30-50 years.

Maybe not as much of a benefit as it once was, (although I wouldn't bet against oil prices booming again at some point) but significantly more benefit than other regional cities in Scotland get from it, which is why talk of Aberdeen without any oil being like Dundee, Perth or Inverness is probably correct - but also half a century premature.

We will have to agree to disagree re oil prices. I can see absolutely no good reason for oil prices to spike again barring civil war in Saudi Arabia. Okay that's not impossible but at the same time it would be a pretty ballsy call.

fun4everyone

bjm81 wrote: »

I work in the industry and know of decent folk paid off and struggled/struggling to find work.

Demand for rental property seems to have taken a big hit. £1200+/month properties now sub £1000. Some demand from students and AWPR workers but not at £1000/month.

If oil stays sub $50 this year and beyond then I don't think the Aberdeen/shire property market is going to hold up. 20 -30% falls wouldn't surprise me.

Even if oil recovers I can't see boom times again but could be wrong. Maybe enough work to maintain the current trimmed workforce but not what it was the last few years.

Anyone buying property now at current prices in Aberdeen/shire needs to consider

This is pretty much exactly the reality of Aberdeen I am experiencing as well. Many of my skilled and experienced friends have been without a job for a long time now.

The rental market is floored like you say. There is no demand from oil workers. I expect house prices to continue to fall as well although not a full on crash.

I also believe that eventually oil and Aberdeen will recover to some degree - although never to the boom times of before. We can count ourselves lucky we have had this period and bubble. Look at the price rises we got in property from 2003-08 .

Buying is the right thing to do in Aberdeen if it is for living in and not for investment. It is however a terrible place for investment in BTL now. The demand is just not there.

As has already been mentioned Aberdeen can branch out into other areas. Academia pulls lots of students to the city, Financial services are strong here. No matter how hard they try though nothing quite seems to shake that "oil capital of Europe" tagline....

Crashy_Time wrote: »

How did you find the idea of a sub-sub-forum that the site owners are embarrassed to have seen on their main board and that you have to log into to debate with about a dozen individuals hell bent on pretending to themselves that UK property is going to continue booming? :rotfl:

Haha I don't mind registering an account to see it, to be fair the overall trend for house prices is always going to be upwards, it just depends how long it takes to get there and if it will beat inflation long term. Rental markets are more debatable.

I also find the idea of calling yourself "Crashy time" and going around trolling buy to letters etc in their bull threads hilarious btw.