Aberdeen, known as the 'granite city' due to the silver coloured buildings that make up the city centre, is situated between the valleys of the rivers Don and Dee on the North Sea coast of Scotland. With a population of around 200,000, the city ranks as the 39th most populous in the UK, based on the 2011 census. Aberdeen is also situated in a beautiful area of Scotland which is full of stunning landscapes and national parks, atmospheric castles and sprawling beaches with golden sand.
Recent figures released by the Aberdeen Solicitors Property Centre (https://www.scottishhousingnews.com/articles/aspc-reports-uptick-in-aberdeen-property-market) have shown that the number of properties up for sale in Aberdeen has risen by 10% in Q1 2024. Sales have also risen by 4% and the average property price now stands at £196,407, which is a 3% rise on last year.
With this surge in activity and a move to resilience and buoyancy, is now a good time to invest in the Aberdeen property market? In this post, we will go through some of the reasons that make Aberdeen a good investment prospect and what Scotland's third largest city brings to the table to attract potential purchasers.
Current Property Values in Aberdeen
A good place to start when thinking about a potential property investment is the current property prices in your selected area. For Aberdeen, the current average sold price is £196,407 which is around £90,000 lower than the house prices in the UK average of £284,691. Prices also vary depending on which type of property you are considering, with flats coming in at around £116,000, terraced houses at around £198,000, semi detached homes at £230,000 and detached properties at £445,000.
The price of the flats in Aberdeen contributes greatly to the average property price coming in below the UK average because there are numerous flats available in the city compared to the other property types. Flats can be good for the rental market, however, so if you are looking to invest in property to let, Aberdeen could have a good selection of homes to choose from.
Rental Yields in Aberdeen
If you are looking to invest in property to rent out in Aberdeen, the current monthly rental amounts you would expect to achieve are as follows:
Flats - £944 per calendar month
Houses - £1572 per calendar month
The average rental price in the UK is currently £1276 (https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/privaterentandhousepricesuk/march2024#:~:text=1.-,Main%20points,944%20(10.9%25)%20in%20Scotland.) so the figures for Aberdeen are coming in at around average. Rental yields are used by property investors and landlords to work out the potential return on a buy-to-let investment. The rental yield is calculated by dividing the annual rental income by the property's value, giving the percentage return an investor can expect to receive in rental income each year.
The average rental yield in the UK is currently 5% to 8% and Aberdeen has recently featured in the top 10 of buy to let property hot spots with a rental yield of around 9.3% per month (https://moneyweek.com/investments/buy-to-let/best-buy-to-let-property-hotspots-in-the-uk) These figures make Aberdeen a good prospect for competitive rental yields.
The Job Market in Aberdeen
The job opportunities in a possible investment area are an important factor to consider. Luckily, Aberdeen has a thriving job market, especially around the oil and gas industries. North Sea oil was discovered off the coast of Aberdeen in 1969 and this triggered a booming industry and led to Aberdeen being called the 'Offshore oil capital of Europe.'
Aberdeen also has an upcoming digital technology industry and a thriving education and healthcare sector, which employs many people in the city. With such a large employment base and a strong local economy, rental accommodation will always be needed, making Aberdeen a strong candidate for property investment.
Cost of Living in Aberdeen
According to Numbeo (https://www.numbeo.com/cost-of-living/in/Aberdeen), the cost of living in Aberdeen is 20.4% less than London with elements such as internet costs, gas and electricity and transport costs coming in at either average or below average. These figures will be enticing for potential renters moving to the Aberdeen area.
What Amenities Does Aberdeen Have to Offer?
Aberdeen is smaller than its Scottish counterparts of Edinburgh and Glasgow but there is plenty on offer to attract investors and renters. There are plenty of parks and open spaces for families and the Cairngorms National Park is just on the doorstep. If you enjoy cultural attractions, the Aberdeen Maritime Museum, the Zoology Museum and the Aberdeen Art Gallery are all great spaces for families to enjoy.
There is also a vibrant social scene with a wide variety of bars and restaurants but if outdoor pursuits are more your cup of tea, golf courses such as Hazlehead Pine and Kings Links will prove to be an attraction. Aberdeen also has great transport links with reliable public transport and a well connected road network. There is also an airport with regular flights to over 40 European destinations.
Universities in Aberdeen
Another possible investment avenue is student rentals. The two Universities in the city are the Robert Gordon University and the University of Aberdeen and with a large population of students, there will always be students on the lookout for a rental property.
Aberdeen Investment FAQs
Is it Likely Aberdeen Property Prices Will Continue to Rise?
There are no certainties in the property world, but as the house prices in Aberdeen are currently below average, they are likely to continue to rise. Research has revealed that over 16 billion should be invested in the North East of Scotland in the next few years, which will help with the popularity and property prices in Aberdeen and the surrounding areas.
Does Aberdeen Have Any Downsides?
As with anywhere in Scotland, the weather could deter some potential residents of Aberdeen. In the winter especially, it can be dark by 3.30 pm which could mean that the majority of the day is spent in darkness. This can also make it difficult to sell a property with the average home being on the market for around 467 days, which is not great if you want to sell quickly.
Is Aberdeen a Good Place to Invest in Property?
With property prices in Aberdeen lower than the average house prices in the UK and with possible rental yields of around 9.4% per month, it looks as though Aberdeen is a good prospect for property investment in 2024. With the potential for price rises and investment into the city, now might be a great time to take a chance on Aberdeen.
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