The Aberdeen House Prices & Rents thread

Crashy_Time

fun4everyone wrote: »

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....




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.

Well Japan shows that you might need to wait a while for prices to come back up after they crash, and many regions of Scotland, N. England/Midlands are supposedly stuck at valuations equal to ten years ago? If you think back to say 1995, think of how the average person lived, the debt they carried, how much they would expect to pay for a house etc. There was a lot of room in the system to blow a massive credit and housing bubble, but they can`t do that again probably in our lifetimes IMO, so there are going to be years and years of unwinding the debt mess, and that will include crashing house prices. (More accurately we could just say that the UK PTB, Brown especially, just rode along on the coat-tails of a global credit expansion for a quick fix feel-good impact at home, but as global credit conditions revert to more accurate pricing of risk the UK will be forced to go along that route as well)


Aberdeen has been "Oil Boom City" for most of my life, so oil industry winding down is a massive impact, and I think the notion that used to get put about that Aberdeen would retain the training facilities and oil industry talent to become a learning hub after the oil had gone is just a bit too optimistic in the digital age.

fun4everyone

Monthly rental of a typical four-bedroom family home in Aberdeen has dropped nearly 20% in the past 12 months. The price of an average detached home has fallen 1.7% in the same period.
Adrian Sangster, national leasing director at city law firm Aberdein Considine said the oil and gas slump, which has seen thousands of highly paid jobs lost in the past year, was having a big impact on the rent landlords could expect to receive.

https://www.energyvoice.com/other-news/92756/aberdeen-property-market-feels-effects-of-oil-slump/

And also

“By the start of 2016, it will be a fact that no rental property type in Aberdeen will have outperformed inflation since the onset of the credit crunch

http://www.scottishhousingnews.com/5821/steep-falls-in-aberdeen-rents-may-pose-questions-for-rent-control-plans/

normPad

I'm not an expert in property - but there has been a huge increase in the number houses built in and around Aberdeen over the last few years.


Now - I came to Aberdeen in 2005 and the rate of building in the last 2 years is greater than anything I saw before.


Sadly, for young people in the oil and gas industry - the idea of living in a property that fits your big bucks salary was beyond a lot of people. Married couples in small 2-bed flats. The cost of an average house being very high.


Now - things are changing in Aberdeen. But what is changing most is the sentiment.
People don't expect house prices to go up (a major reason why they were rising 2000-2006).
People are not sure of their jobs and are not buying or trading up (look at the number of sales - not prices).


Friends of mine are dropping from 2 salaries to 1 salary family status - big house in Kingswells and due to low IRs they can just hang on now - but it's not way to live.


Aberdeen optimists have failed to learn the lessons from the past.
And remember - the yield on an unlet property is 0% (or worse once you consider your other charges).


By the way - enough slagging off Dundee. It's actually quite nice and only getting better.

normPad

Also for Dundee - property is maybe half the price of Aberdeen (much cheaper) and you can actually commute to the rest of Scotland to take a job in the central belt.


Out of work in Aberdeen = marooned on a granite island.

fun4everyone

BP Cuts 4000 Jobs - 600 of them specifically in the north sea.

http://www.bbc.co.uk/news/business-35289771

Also Premier Oil had its shares suspended this morning

https://www.energyvoice.com/oilandgas/north-sea/98410/breaking-premier-oils-shares-suspended/

Really is tough times for Aberdeen. Shame because I love this city. I wonder how much Union Square/Bon Accord etc charge in rent. Commercial property around here must be diving as well.

fun4everyone

Oil down sharply again today (over 5%) and now firmly below $30 a barrel.

From what I can gather Aberdeen needs oil roughly over $60 a barrel for the majority of the rigs to be profitable again and over $80 before employment levels could go back to previous highs.

I think prices will recover eventually, but it could take some years yet

CLAPTON

fun4everyone wrote: »

Oil down sharply again today (over 5%) and now firmly below $30 a barrel.

From what I can gather Aberdeen needs oil roughly over $60 a barrel for the majority of the rigs to be profitable again and over $80 before employment levels could go back to previous highs.

I think prices will recover eventually, but it could take some years yet

so the good news continues

fun4everyone

CLAPTON wrote: »

so the good news continues

For everyone in the UK who is not in Aberdeen or employed by an oil company, I guess it does.

Thrugelmir

fun4everyone wrote: »

For everyone in the UK who is not in Aberdeen or employed by an oil company, I guess it does.

The impact is going to felt far wider than just Aberdeen.

A friend has worked in Doha for the past two years on a new hospital project (it's yet to open). 15 consultants had their contracts terminated at the beginning of December. All expats , all have moved their families out. No pay off. Immediate termination of contracts. The lack of oil revenue is biting. As for my friend. Her current contract ends next month in February. She expects at best to get an offer of around 35% less on the new contract. With only a year rather than 2 previously.

CLAPTON

fun4everyone wrote: »

For everyone in the UK who is not in Aberdeen or employed by an oil company, I guess it does.

indeed so, most change will harm a few

eliminating cancer will mean that some oncologists will be unemployed