The future of Aberdeen’s property market post Covid-19 is “difficult to predict”, a housing boss has said.
Due to the coronavirus pandemic, home sales have “stalled” in the city, with potential homeowners unable to visit properties.
However, an estate agency has also said it expects housebuilders will continue to take a longer-term view on the city.
It is clear that coronavirus has had a major impact on house sales in the city, for both older homes and new builds, however there remains some optimism about Aberdeen’s ability to bounce back.
Although housebuilders are said to be looking at medium to long-term goals for Aberdeen, for private owners, it has been more difficult to continue.
John MacRae, chairman of ASPC, said he believes the city is a resilient place, with “sensible folk”.
He said: “It is true that before Covid-19 we were beginning to think that there might be some signs that our market was starting to improve. The distinction has to be drawn, however, between new build and second hand housing.
“For new builds, builders have greater ability than private owners to offer inducements, such as part exchange, bonus items such as LBTT paid, or deals on extras. For them, the ability to generate cash flow is paramount and allows builders to take a commercial view on any transaction. For private owners, it has been more difficult. Nevertheless, this year did give some encouragement to agents that sellers were becoming acclimatised to the reality of valuations and were ready to negotiate with sensible but realistic offers.
“The addition of Covid -19 to the picture changed things dramatically. Insertions of new properties are almost at zero, as the public comply with Government advice on isolation. Sales are greater than insertions but still very low. The market has stalled.
“What will happen, when lockdown eases and eventually ceases is difficult to predict. There will be a degree of pent up demand, but I believe that may well be tempered by understandable caution on the part of the public, leading to a more drawn out, rather than sudden, return to what will be “normal”. I think it will take some time to work through.”
Estate agency Savills, said there had been an optimism in the city’s land market at the beginning of 2020.
It remains confident that this will continue in the future, as it has shown resilience to economic challenges in the past.
Head of development for Savills Aberdeen, Graham Reid said: “A number of national housebuilders looking to enter the Aberdeen market, coupled with an increase in demand from active players looking to increase their outlets, was feeding a growing optimism in the city land market at the start of the year.
“While the current pandemic has resulted in a pause, the expectation is that housebuilders will continue to take a longer term view on the city’s recovery.
“Aberdeen has shown resilience to micro and macro-economic challenges in the recent past and is proactively diversifying the economy and attracting new investment.”