After the gold rush...
It’s not all gloom and doom following the oil slump, writes Paul Drury
Economics is a wonderful thing. The discovery of north sea oil heralded a new financial dawn for Aberdeen. With jobs aplenty and money no object, the lure of black gold propelled real estate prices to among the highest in scotland.
But what happens after the gold rush? The same economic principles which the Granite city so successfully surfed for 40 years have turned the north sea waters choppy.
Figures this week from Registers of scotland reveal a 9.8 per cent drop in the price of the average house in the city in the past 12 months to £167,608. scotland’s share of north sea oil revenue collapsed in 2015-16, from £1.8billion the previous year to £60million.
surely an economy built on the soaring price of oil must suffer when that price plummets?
Well, yes and no. Property insiders insist the Registers of scotland figures – for December – lag behind a recovery in the price of oil.
The oil-producing cartel oPEc has signalled an end to high production levels, which were responsible for the price plunge. A barrel of Brent crude which sat at $110 in may 2014 fell to only $30 in January last year, prompting restructuring in the industry. But Brent is now trading at $55.77 with a rising price forecast for this year.
Estate agent savills conducted research into the impact the downturn has had and will continue to have on the Aberdeen housing market. The firm’s Fiona Gormley said: ‘The restructure that is currently taking place within the sector is likely to result in a far more efficient and sustainable industry.
‘House price inflation in Aberdeen requires a similar readjustment to ensure a sustainable market that is supported not only by oil but by a more broadly based economy.’
Things are more encouraging in the wider Aberdeenshire area. Here, prices fell by 3.5 per cent. At midmar, near inverurie, a property harks back to the days when agriculture provided the bedrock to the area’s economic fortunes.
Built of granite under a slate roof, mains of Kebbaty is a delightful property with attached steading, built around a courtyard.
The dressing room to the master bedroom can be accessed via an outside staircase, a throwback to the days when it would have been a farm worker’s bedroom.
many of the four public rooms are dual aspect with views across open farmland. There are four bedrooms, plus outbuildings.
Westhill, the developing centre of the oil industry in Aberdeen, lies only 20 minutes away.
Offers over £575,000 to Shauni Patterson of Savills, Aberdeen. Tel 01224 971 110.