Aberdeen, Aspc Stats

[reverand_cat]

Another local estate agent...

 

Don't sell now!

http://www.stonehouseproperty.co.uk/news/thinking-of-selling-5-reasons-why-you-shouldn-t

(...wait till the value drops even further!)

[delboypass]

1 hour ago, shortbread said:

Does anyone know if Baker Hughes is winding up in Aberdeen?

You will see a lot of consolidation happening in the market. BH closing up Dyce main office and moving out to Portlethen. It had always been a plan to build a new building on the spare ground but now i guess sell all the land.

It is the cylindrical nature of oil. As it rises, we build more. As it falls, we sell and consolidate.

 

[delboypass]

1 hour ago, reverand_cat said:

I think it was with regards to pricing. Most people don't give much thought to the volumes traded, they only care about the ££££.

I think what is good though is that people are now reporting big drops like the 8% ..

This is major publications and out there so no more head in the sand and anyone you now speak to who used to be about big house gains now even realizes the downward market forces.

Aberdeen lost out in the 80s,90s and 2000 years by not building enough accommodation for its workforce forcing house prices to spiral unchecked.. this is just the yang to the ying. You cant have 20% house price gain with pay increases of 1% and inflation of 1%. Shows how bent the CPI/RPI basket really is.

[shortbread]

1 hour ago, delboypass said:

the cylindrical nature of oil. As it rises, we build more. As it falls, we sell and consolidate.

 

I could be wrong but I do not think this change is cyclical, there is now a structural change in oil supply.

The fundamentals of the US fracking industry is poor at present, with lots of debt and risk. But this is temporary, once the market crosses the $60 barrier I believe more investment will be made into Shale as the the both the investment and turn around time is fractional as compared to traditional drilling methods, especially deep sea drilling.

Strong US and Russian O&G supply are strong enough to compete against the OPEC majors. 

The only way out of this is for all producers to come to an agreement and fix quotas, easier said than done.

[cashinmattress]

54 minutes ago, delboypass said:

It is the cylindrical nature of oil. As it rises, we build more. As it falls, we sell and consolidate.

Cyclical?

I don't buy into your argument that we will build more. O&G spend is maxed out and the NE has an overabundance of everything.

If anything, the looming fiscal deficit/reality checks of DECOM and the new 'normal' of low cost production is going to further the downsizing and consolidation regardless of oil price.

IMO the only thing that can happen to turn this around is a major war. Outside of that, nobody is going to empty their pockets when there are better returns coming from the ME & Iran, shale in Texas and Oklahoma, etc...

[delboypass]

https://www.eveningexpress.co.uk/fp/news/local/baker-hughes-close-aberdeen-base1/

BH continues the consolidation .. who will move into these vacated buildings/plots though with all the commercial space available throughout Aberdeen and Aberdeenshire.

BoD campus was already half empty.years ago

[cashinmattress]

14 minutes ago, delboypass said:

https://www.eveningexpress.co.uk/fp/news/local/baker-hughes-close-aberdeen-base1/

BH continues the consolidation .. who will move into these vacated buildings/plots though with all the commercial space available throughout Aberdeen and Aberdeenshire.

BoD campus was already half empty.years ago

Who knows. Likely nobody...especially with these types of forecasts... (from local energy rag)

Quote

Brent crude will trade between $55 and $65 a barrel for most of 2017-21, the Economist Intelligence Unit (EIU) said yesterday.

Opec’s oil output deal will nudge prices up next year, but the proposed reduction is too small to restore the glory days of early 2014, according to EIU, which is the research and analysis division of the Economist Group.

 

[shortbread]

What would be the total downward movement in Aberdeen prices since the peak in mid 2014?! Approximately 20%?

[Ignorantbliss]

On 10/21/2016 at 11:39 AM, delboypass said:

https://www.eveningexpress.co.uk/fp/news/local/baker-hughes-close-aberdeen-base1/

BH continues the consolidation .. who will move into these vacated buildings/plots though with all the commercial space available throughout Aberdeen and Aberdeenshire.

BoD campus was already half empty.years ago

Baker Hughes are actually closing another three facilities in Aberdeen (they closed the Westhill office last year) - Balgownie, one of the Bridge of Don bases and the big base at Stoneywood (next to BP).  

The closure of the Stoneywood facility is due by the end of December and the staff based there are supposedly going to be redeployed at the remaining facilities in the likes of Portlethen and Kirkhill - though as there are few spaces in there for additional personnel the omens are not good for the Stoneywood people.

They have already started demolishing part of the Stoneywood facility (old portacabins nearest BP car park) and the for sale sign I hear is already up.  

The closure of Stoneywood strongly indicates that they consider Aberdeen is finished as a major business base - they purpose built Stoneywood around 2002 to act as the main showcase operational HQ for the UK and they got the adjoining portacabin site from DrilQuip to allow the construction of an extension to allow the closure of Balgownie & Westhill.   I hear nowadays that Baker has stopped considering the UK as a separate marketing/operations region and they have lumped the UK sector in with Norway with all the key management and decisions now being based/made in Stavanger - expect to see more of the Aberdeen bases work transferred to Norway in the months/years ahead unless there is a sudden change in UK D&E activity.

So more empty offices coming onto the market - or will they demolish the lot and build more rabbit hutches like those on the old BP site?

[Ignorantbliss]

33 minutes ago, Ignorantbliss said:

Baker Hughes are actually closing another three facilities in Aberdeen (they closed the Westhill office last year) - Balgownie, one of the Bridge of Don bases and the big base at Stoneywood (next to BP).  

The closure of the Stoneywood facility is due by the end of December and the staff based there are supposedly going to be redeployed at the remaining facilities in the likes of Portlethen and Kirkhill - though as there are few spaces in there for additional personnel the omens are not good for the Stoneywood people.

They have already started demolishing part of the Stoneywood facility (old portacabins nearest BP car park) and the for sale sign I hear is already up.  

The closure of Stoneywood strongly indicates that they consider Aberdeen is finished as a major business base - they purpose built Stoneywood around 2002 to act as the main showcase operational HQ for the UK and they got the adjoining portacabin site from DrilQuip to allow the construction of an extension to allow the closure of Balgownie & Westhill.   I hear nowadays that Baker has stopped considering the UK as a separate marketing/operations region and they have lumped the UK sector in with Norway with all the key management and decisions now being based/made in Stavanger - expect to see more of the Aberdeen bases work transferred to Norway in the months/years ahead unless there is a sudden change in UK D&E activity.

So more empty offices coming onto the market - or will they demolish the lot and build more rabbit hutches like those on the old BP site?

Should clarify that it's supposedly a small consultancy office in Bridge of Don that is closing (not a base....doh) and not the manufacturing base on Woodside Road.

[jackwhiteisgod]

Bumped into a guy I went to uni with in Aberdeen (we're both in London now). He was lamenting that the place he owns in Aberdeen used to get him £850pm and now it's £650. Says value has gone down from 230k to 140k. I asked him how much he paid for it (probably about ten years ago) he said 130k so I asked him what he was complaining about! The mad thing is he's selling it because he now wants to buy a property in Ireland (he's Irish) because "prices are moving up". He's completely clueless though, still thinks London is "good value"

[EME]

2 hours ago, jackwhiteisgod said:

Bumped into a guy I went to uni with in Aberdeen (we're both in London now). He was lamenting that the place he owns in Aberdeen used to get him £850pm and now it's £650. Says value has gone down from 230k to 140k. I asked him how much he paid for it (probably about ten years ago) he said 130k so I asked him what he was complaining about! The mad thing is he's selling it because he now wants to buy a property in Ireland (he's Irish) because "prices are moving up". He's completely clueless though, still thinks London is "good value"

Sounds like a bargain, I could do with another BTL, where is it? I'll buy it for £140k tomorrow!

[jfk]

1 hour ago, EME said:

Sounds like a bargain, I could do with another BTL, where is it? I'll buy it for £140k tomorrow!

He's not going to give it away! !

[reverand_cat]

ASPC Q3 out...

-9.8% annualised drop...

 

Looks like the bubble has finally burst, and that graph doesn't look like "froth off the top", it looks like the start of a full on crash. Don't you think?

https://www.aspc.co.uk/media/77219/third-quarter-2016.pdf

This is going to be painful.

[Oily]

17 minutes ago, reverand_cat said:

ASPC Q3 out...

-9.8% annualised drop...

 

Looks like the bubble has finally burst, and that graph doesn't look like "froth off the top", it looks like the start of a full on crash. Don't you think?

https://www.aspc.co.uk/media/77219/third-quarter-2016.pdf

This is going to be painful.

Worth reading the report if only for John MacRae's hilarious comments.  You've got to give him credit for his positive/deluded outlook, entirely unaffected by the grim facts. He"s also announced a recovery in the North Sea O&G industry. What a visionary.

A 9.8% drop is significant but of course what the report doesn't address is the level of price reduction that would be required to start shifting the ever rising >5,000 properties currently languishing on the ASPC website. Nobody knows but I reckon it would be a lot more than 9.8%.

[Diver Dan]

2 hours ago, Oily said:

A 9.8% drop is significant but of course what the report doesn't address is the level of price reduction that would be required to start shifting the ever rising >5,000 properties currently languishing on the ASPC website. Nobody knows but I reckon it would be a lot more than 9.8%.

The ASPC total of just over 5000 properties hasn't really shifted much in the past few weeks. Do we know if this is because places are being withdrawn from the market as fast as they are being added or is stuff actually selling?

Still plenty of pictures of snowy grass and leafless trees in there though.

Edited October 24, 2016 by Diver Dan

[delboypass]

More offices being built just on entry to Westhill... crazy days

 

[Democorruptcy]

On 20/10/2016 at 11:57 AM, delboypass said:

I think what is good though is that people are now reporting big drops like the 8% ..

This is major publications and out there so no more head in the sand and anyone you now speak to who used to be about big house gains now even realizes the downward market forces.

Aberdeen lost out in the 80s,90s and 2000 years by not building enough accommodation for its workforce forcing house prices to spiral unchecked.. this is just the yang to the ying. You cant have 20% house price gain with pay increases of 1% and inflation of 1%. Shows how bent the CPI/RPI basket really is.

Of course you can.

Just increase mortgage income multipliers, extend mortgage terms and have tax breaks for BTL. If prices were related to incomes we wouldn't have house prices where they are now.

[Toast]

Minus 9.8% is quite something ... but still not quite DrBubb's crash cruise speed of 1% per month. If that had really happened a decade and more ago, rather than being foolish optimism, we'd be in a very different world. </sadness>

[TheCountOfNowhere]

2 minutes ago, Toast said:

Minus 9.8% is quite something ... but still not quite DrBubb's crash cruise speed of 1% per month. If that had really happened a decade and more ago, rather than being foolish optimism, we'd be in a very different world. </sadness>

The last quarterly result was 3.4%.

 

1.13%

Warp factor 9 cap'n

[Toast]

4 minutes ago, TheCountOfNowhere said:

Warp factor 9 cap'n

Now we need some good ol' trekkie time-travel to back-date it for the rest of the UK!

Seriously though, the price implosion in central London may well "ripple out", but is there any evidence of contagion spreading from Aberdeen to neighbouring areas?

[AD14]

1 minute ago, Toast said:

Now we need some good ol' trekkie time-travel to back-date it for the rest of the UK!

Seriously though, the price implosion in central London may well "ripple out", but is there any evidence of contagion spreading from Aberdeen to neighbouring areas?

Aberdeen is generally somewhat isolated from surrounding areas. The rest of the Shire is also experienced the effects of the oil price decline, too, but I don't necessarily see why there should be a ripple effect spreading to other areas that don't rely on the oil industry to the same extent. If anything, I would expect them, particularly Edinburgh and Glasgow, to see gains as more people look for work down there, putting more pressure on the housing stock.

[Toast]

1 hour ago, AD14 said:

Aberdeen is generally somewhat isolated from surrounding areas. The rest of the Shire is also experienced the effects of the oil price decline, too, but I don't necessarily see why there should be a ripple effect spreading to other areas that don't rely on the oil industry to the same extent. If anything, I would expect them, particularly Edinburgh and Glasgow, to see gains as more people look for work down there, putting more pressure on the housing stock.

Fair enough on the geographic / oil jobs front, so that in London we might expect an actual propagating wave of price falls as people still often want to live and work in the city. However, for Aberdeen there is another possible mechanism, where if people own rental properties in Aberdeen but live elsewhere, the poverty from price declines gets spread around more widely. Is there any evidence for large scale BTL, but where the "owners" don't live in the city? 

[AD14]

2 hours ago, Toast said:

Fair enough on the geographic / oil jobs front, so that in London we might expect an actual propagating wave of price falls as people still often want to live and work in the city. However, for Aberdeen there is another possible mechanism, where if people own rental properties in Aberdeen but live elsewhere, the poverty from price declines gets spread around more widely. Is there any evidence for large scale BTL, but where the "owners" don't live in the city? 

I don't know much about the BTL situation in Aberdeen, but I'm not sure how the mechanism you are suggesting would lead to a noticeable ripple effect. 

[cashinmattress]

1 hour ago, AD14 said:

I don't know much about the BTL situation in Aberdeen, but I'm not sure how the mechanism you are suggesting would lead to a noticeable ripple effect. 

Pretty much. Aberdeen City and much of the shire exist in a bubble. Perhaps to the geographical limit of reasonable commuting...say anywhere 40 mins from Altems, Dyce, or Westhill. And as such, with its unique (and former) economic advantage over the rest of Scotland and about 80% or 90% of the UK...it is going to continue to fall...crash actually.

Low oil price, mature basin and DECOM liabilities, aging and lots of retirements in the workforce in O&G, Brexit, lack of affordability (still) for the non-O&G people who will carry the region forward, little incentives for investment vs shale/Iran/Libya/et al...and a point often overlooked...that with all the out of cert/condemned oilfield kit, people, rigs, vessels, even the mundane like software licences lapsed...starting up the patch to its former heyday level is simply a non starter by even a cursory chech of the figures.

Why the council & scot.gov has not started holding televised surguries, public forums and such to address the issues and prepare or at least inform people is beyond me. Papers aint helping either. I think that many in the region and business have capitulated and accept that the industry has settled into one of low cost with an actual end in sight. No more boom.