2023 Property Market Reflections
The fourth quarter statistics from the ASPC for 2023 reflect the challenges our local market has faced over the last year. The quarterly house price change in Aberdeen City and Suburbs is 0.5%, while the annual change is -3.1%. Taken over five years, the index is “marginally positive” at +1.0%.
Since the 2022 Autumn budget, buyers and sellers have continued to feel the effects of both the rising cost of living and interest rates. In a local market which had only just got onto an even standing following the oil and gas downturn in 2015 and the pandemic, this felt like yet another hurdle. As a result of the turbulent mortgage market, many buyers found that they simply could no longer afford to purchase their first or next home.
Buyer wariness and affordability issues in 2023 resulted in a more sluggish market compared to the first half of 2022. However, despite continued interest rate rises throughout 2023 the resilient City and Shire market has weathered these challenges remarkably well, with continuing demand for properties in desirable locations and in good condition. Whilst the sale of properties above £400,000 may have “stuttered,” we have also seen the long awaited return of property investors. Typically investors are looking to source properties below £100,000 which are in need of renovation, this has helped to alleviate demand in the lettings sector, which has consequently performed very well over the last year as potential buyers have put their moves on hold.
As we look forward into 2024 there is cautious optimism as mortgage lenders begin to lower interest rates on their products. It is widely expected that the Bank of England will lower the interest rate if inflation continues to fall. However, international factors such as the ongoing war in the Ukraine and unrest in the Middle East may well colour the economic forecast going forward.
The late winter market is the ideal time of year to “do your homework” if you are thinking of buying, selling or leasing so that you have the luxury of launching to the market at the right time for you. For those sellers struggling to achieve a sale, thought should be had to reviewing marketing campaigns and asking prices ahead of the typically buoyant Springtime market.
If you would like to speak to a member of our property team about your plans for buying, selling or leasing during 2024, please email property@mackinnons.com
