09 Mar 2017

Scottish property market report reveals impact of oil downturn

Scottish property market report reveals impact of oil downturn

Property sales are up in Edinburgh, Glasgow and Dundee, but still suffering in Aberdeen and Aberdeenshire.

New figures from Registers of Scotland show that the 2016 calendar year was a relatively stable period for the Scottish residential property market, compared with 2015, when the usual monthly pattern of transactions in the market was affected by the introduction of the new Land & Buildings Transaction Tax (LBTT).  

There was an increase in both the volume and market value of Scottish property sales in 2016, though the average price of a residential property fell slightly compared to the previous year.

Increase in sales

The 2016 Annual Market Review shows a 3.3% year on year rise in property sales across Scotland, with 99,860 total sales.

Volumes were strong across the country, with only five local authorities reporting decreases.

The largest decreases were in Aberdeen City and Aberdeenshire where sales fell by 19.1%; this reduction was influenced by the downturn of the oil industry and its effect on demand for housing in the area.

However, there is growing anecdotal evidence suggesting that the decline may have bottomed out and that a small degree of optimism is returning to the market.

In relation to Scotland’s city local authorities, the City of Edinburgh and Glasgow City remained the national powerhouses, though Dundee showed the biggest rise in volume for city local authorities, with an increase of 13%.

Property values

The value of the Scottish property market increased by 1.3% in 2016, to £16.6billion. Despite this rise in the market as a whole, the average price of a residential property in Scotland decreased to £166,056, a reduction of 1.9%.

The highest average price was recorded in East Renfrewshire, at £242,003. Along with the drop in volume, Aberdeenshire and Aberdeen City witnessed a significant drop in house prices, falling by 9.3% and 7.8% respectively; again, this is likely linked to the downturn in the oil industry.

The report also provides information on sale price by house type. All property types showed a decrease in average price.

The smallest decrease in was for semi-detached properties which fell by 1.4% to £157,131. The average price for flats, at £130,999, fell by 3.1% compared with 2015. Additional analysis is provided on volume of sales by price bracket, by cash or mortgage sale status, and by new-build status.

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