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The McGlashan

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  1. Gosh! Down 10% in 28 days. From this page. http://www.ros.gov.uk/public/news/latest_house_prices.html#
  2. Aberdeen monthly figures from RoS http://www.ros.gov.uk/pdfs/local%20authorities%20dec%202009.pdf Down -5% MoM Down -0.5% YoY Volume still depressed; down -60% from the peak volume of Aug 06 and down -49% from the price peak of July 07
  3. RoS figures for Embra. http://www.ros.gov.uk/pdfs/local%20authorities%20dec%202009.pdf Down -4% MoM on highest volume since July 2008 Up +3.7% YoY
  4. RoS Monthly figures for December: http://www.ros.gov.uk/pdfs/local%20authorities%20dec%202009.pdf Aberdeen down sharply reversing last months gains. Edinburgh down sharply Glasgow stable Scotland Stable. Dundee BOOM! Dundee average house price now at an all-time high. Unbelievable! (I'd better stop ramping the place!)
  5. http://www.ros.gov.uk/pdfs/Statistical%20Publication%20(Oct%20-%20Dec%202009)%20issued%20Feb%202010%20Final.pdf Scottish prices up 1.3% YoY. Inflation @ ~3% => Scottish House Prices DOWN!
  6. Rental yields dropping in Aberdeen - Strong indication that sales prices are detached from fundamentals Rental yields falling below average indicates that sale prices are out of line with 'fair value'. Price/rent ratios are a common way to evaluate housing market fundamentals; rents incorporate fundamental influences on housing demand and supply. People need to live somewhere – the choice is between buying your own home or renting, not between spending money on housing or retaining income for other purposes. Moreover, rental expenditure is not subject to the market distortions which plague the house purchase market. We can therefore use yield fluctuations to determine the extent of those distortions. We've heard time and again that Aberdeen is the BTL paradise where rental yields of 7% are common. On the Aberdeen threads we've had landlords boasting of 12% and 8% yields. (Though these claims were subject to heated debate.) Not any more. A quick look at comparable properties for sale and let on ASPC indicates that yields like that are a thing of the past. If we take the 'common' 7% yield to indicate a fair value equilibrium, we can put a rule of thumb on asking prices to work out how far detached from fundamentals the price is. Actually, let's be conservative and call net 6% yield a fair-value price for Aberdeen. (The long-run UK average is 6.4%, rising to 7.9% in 'top university towns' according to Propertywire.) (Comparable properties - comparable or same areas) __________________________________________________________________________________________ FTB-type one-bet flats Rosebank Place, Ferryhill http://www-q.aspc.co.uk/cgi-bin/public/LiveProperty/276626?ID=FGLFGAAK#picture O/o £115k http://www-p.aspc.co.uk/cgi-bin/public/LiveProperty/273620?ID=FGLFGAAK#picture Rent £500 pcm Yield (net) = 4.7% => asking price is 28% higher than fundamentals would dictate. Fair value asking price for this type of property in this sub-area would be £90k __________________________________________________________________________________________ 'Aspirational' new-build 2-bed flats Grandholm Mills http://www-q.aspc.co.uk/cgi-bin/public/LiveProperty/276304?ID=FGLFGAAK#picture O/o £165k http://www-p.aspc.co.uk/cgi-bin/public/LiveProperty/276443?ID=FGLFGAAK#picture Rent £800 pcm Yield = 5.2% => asking price is 15% higher than fundamentals would dictate. Fair value asking price for this type of property in this sub-area would be £143k __________________________________________________________________________________________ 3-bed semi's Broomhill http://www-q.aspc.co.uk/cgi-bin/public/LiveProperty/274635?ID=FGLFGAAK#picture O/o £360k http://www-p.aspc.co.uk/cgi-bin/public/LiveProperty/276689?ID=FGLFGAAK#picture Rent £990 pcm Yield = 2.97% => asking price is 100% higher than fundamentals would dictate! By the profit's beard! Fair value asking price for this type of property in this sub-area would be £180k __________________________________________________________________________________________ 4-bed detached West end Cragiebuckler http://www-q.aspc.co.uk/cgi-bin/public/LiveProperty/261098?ID=FGLFGAAK#picture O/o £425k West end Mannofield http://www-p.aspc.co.uk/cgi-bin/public/LiveProperty/276316?ID=FGLFGAAK#picture Rent £1350 pcm Yield = 3.4% => asking price is 76% higher than fundamentals would dictate! Fair value asking price for this type of property in this sub-area would be £241k __________________________________________________________________________________________ What factors are at play here? What will bring the market back to fundamental equilibrium? What's the situation in other Scottish towns? Originally posted in 'Aberdeen - ASPC stats' thread.
  7. Rental yields dropping in Aberdeen - Strong indication that sales prices are detached from fundamentals Rental yields falling below average indicates that sale prices are out of line with 'fair value'. Price/rent ratios are a common way to evaluate housing market fundamentals; rents incorporate fundamental influences on housing demand and supply. People need to live somewhere – the choice is between buying your own home or renting, not between spending money on housing or retaining income for other purposes. Moreover, rental expenditure is not subject to the market distortions which plague the house purchase market. We can therefore use yield fluctuations to determine the extent of those distortions. We've heard time and again that Aberdeen is the BTL paradise where rental yields of 7% are common. On this very thread we've had landlords boasting of 12% and 8% yields. (Though these claims were subject to heated debate.) Not any more. A quick look at comparable properties for sale and let on ASPC indicates that yields like that are a thing of the past. If we take the 'common' 7% yield to indicate a fair value equilibrium, we can put a rule of thumb on asking prices to work out how far detached from fundamentals the price is. Actually, let's be conservative and call net 6% yield a fair-value price for Aberdeen. (The long-run UK average is 6.4%, rising to 7.9% in 'top university towns' according to Propertywire.) (Comparable properties - comparable or same areas) __________________________________________________________________________________________ FTB-type one-bet flats Rosebank Place, Ferryhill http://www-q.aspc.co.uk/cgi-bin/public/LiveProperty/276626?ID=FGLFGAAK#picture O/o £115k http://www-p.aspc.co.uk/cgi-bin/public/LiveProperty/273620?ID=FGLFGAAK#picture Rent £500 pcm Yield (net) = 4.7% => asking price is 28% higher than fundamentals would dictate. Fair value asking price for this type of property in this sub-area would be £90k __________________________________________________________________________________________ 'Aspirational' new-build 2-bed flats Grandholm Mills http://www-q.aspc.co.uk/cgi-bin/public/LiveProperty/276304?ID=FGLFGAAK#picture O/o £165k http://www-p.aspc.co.uk/cgi-bin/public/LiveProperty/276443?ID=FGLFGAAK#picture Rent £800 pcm Yield = 5.2% => asking price is 15% higher than fundamentals would dictate. Fair value asking price for this type of property in this sub-area would be £143k __________________________________________________________________________________________ 3-bed semi's Broomhill http://www-q.aspc.co.uk/cgi-bin/public/LiveProperty/274635?ID=FGLFGAAK#picture O/o £360k http://www-p.aspc.co.uk/cgi-bin/public/LiveProperty/276689?ID=FGLFGAAK#picture Rent £990 pcm Yield = 2.97% => asking price is 100% higher than fundamentals would dictate! By the profit's beard! Fair value asking price for this type of property in this sub-area would be £180k __________________________________________________________________________________________ 4-bed detached West end Cragiebuckler http://www-q.aspc.co.uk/cgi-bin/public/LiveProperty/261098?ID=FGLFGAAK#picture O/o £425k West end Mannofield http://www-p.aspc.co.uk/cgi-bin/public/LiveProperty/276316?ID=FGLFGAAK#picture Rent £1350 pcm Yield = 3.4% => asking price is 76% higher than fundamentals would dictate! Fair value asking price for this type of property in this sub-area would be £241k __________________________________________________________________________________________ What factors are at play here? What will bring the market back to fundamental equilibrium? What's the situation in other Scottish towns? Copied to "Is Scottish Property most overpriced in UK?" thread.
  8. Hiya Pele, I tend to look at the Registers of Scotland data which is here: http://www.ros.gov.uk/professional/eservices/land_property_data/lpd_stats.html However, it goes by Local Authority, not city or constituency, so data which includes Inverness will also include whole of Highland. You might try looking at Zoopla http://www.zoopla.co.uk/house-prices/inverness/ All the best, McG
  9. Cork y'say? Do you know the place? Tell us what you think of it compared to Aberdeen.
  10. That all looks really nice - where's that? And how much are the houses?
  11. It's a disaster. Yet entirely predictable - this blight is the forseeable consequence of oversupply in the commercial property sector. Overdevelopment overcapacity malinvestment misallocation-of-capital a go-go! Union Plaza - behind Gilcomston Church on Union Row. (Not a bad building on a former industrial gap-site) Union Sq and Jury's Inn, Guild St (Overdevelopment brutalises Guild St) Aberdeen Gateway & Axcess, Cove (Requires AWPR to make any sort of sense) City Wharf and Hotel Ibis on Aberdeen's 'Historic'(?!) Shiprow (an unmitigated disaster of out of scale overdevelopment of a historic site) IQ Justice Mill Lane (It's huge!)
  12. Photos on and around Holburn St, Union St and Bridge St.
  13. UK Unemployment down! http://news.bbc.co.uk/1/hi/business/8469648.stm Aberdeen Unemployment UP!
  14. Some ASPC Stats! It's ASPC quarterly bulletin time. http://www.aberdeencity.gov.uk/nmsruntime/saveasdialog.asp?lID=27660&sID=332 City centre: Quarterly change +2.3% Annual change +8.2% Change from Peak (Q3 07) -5.7% Bridge of Don/Danestone: Quarterly change +13.9% Annual change +19.7% Change from Peak (Q2 08) +0.8% Bucksburn: Quarterly change -1.5% Annual change -1% Change from Peak (Q2 07) -21.4% Lower Deeside: Quarterly change +1.7% Annual change -23.9% Change from Peak (Q4 08) -23.9% Nigg/Cove: Quarterly change +13.4% Annual change +2% Change from Peak (Q2 07) -8.7% Kingswells: Quarterly change -0.9% Annual change +9.3% Change from Peak (Q4 07) -18.5% Dyce: Quarterly change +13% Annual change +7.8% Change from Peak (Q3 07) -1.7% Westhill/Kintore/Blackburn/Kemnay: Quarterly change -0.6% Annual change -1.0% Change from Peak (Q2 08) -10.2% Ellon/Newburgh/Balmedie: Quarterly change -6.4% Annual change +3.6% Change from Peak (Q2 07) -10.0% Inverurie/Oldmeldrum/Pitmedden: Quarterly change +4.5% Annual change -4.9% Change from Peak (Q2 07) -8.6% Newmachar: Quarterly change +19.7% Annual change +8.2% Change from Peak (Q3 08) -8.1% Banchory/Durris/Drumoak: Quarterly change -24.5% Annual change -7.8% Change from Peak (Q3 08) -20.5% Stonehaven/Portlethen/Newtonhill: Quarterly change -1.1% Annual change +8.2% Change from Peak (Q1 08) -8.2% Total Abdn Housing Area Quarterly change +0.7% Annual change +6.0% Change from Peak (Q1 08) -3.0%
  15. I disagree entirely. More affordable housing in Aberdeen would lead to a far nicer class of people populating the city. Fixed.
  16. That's the one! What was the name of the larger-than-life foul-mouthed mother-figure who ran the greasy spoon there? She was quite a character. The lounge bar was also an 'interesting' spot.
  17. Hiya Quine, Its the former 'Bowl' bowling alley and its car-park. It's very nearly finished and it actually (in my opinion) looks quite good. I'm not usually a big fan of 'contemporary modern', particularly when the style is deployed without thought, but the hotel frontage is onto St-Andrew's St and sits on the site of the former car-park, which, for the whole of my life has been a scrappy gap-site. The new frontage is a great improvement. Decent building or not, tho', it's still part of a drastic over-supply in the sector which is coming soon to Aberdeen.
  18. Aberdeen Hotel Bubble. It's long been a source of complaint and puzzlement that Aberdeen has a shortage of hotel rooms. That shortage is about to turn into a glut. Suddenly, there is lots and lots of new-build hotel accommodation at various stages of completion: 1. Jury's Inn at Union Square Recently opened - 203 rooms. http://aberdeenhotels.jurysinns.com/ 2. Park Inn at Justice Mill (Now Travelodge - ugh) Nearing completion - 185 rooms. http://www.richardmurphyarchitects.com/projects/429/ 3. Hotel Ibis at City Wharf Nearing Completion - 107 rooms http://www.aberdeencitywharf.co.uk/pdfs/leisure_and_retail.pdf 4. Radisson Edwardian at AECC Open soon? - 222 rooms http://www.aecc.co.uk/aecchoteltobearadissonedwardian.aspx 5. Unnamed Boutique Hotel, St Andrews St Nearing completion, 100 rooms 4 star Part of St Andrews Square Development http://www.bancon.co.uk/eng/homes/standrews.pdf 6. Unnamed Hotel, E&M site, Union St Consent granted, 100 rooms http://www.worldarchitecturenews.com/index.php?fuseaction=wanappln.projectview&upload_id=10912 7. Bells Hotel - Justice Mill Lane side Consent granted for 10-story 217 room extension http://news.stv.tv/scotland/north/94078-aberdeen-hotel-expansion-plans-approved/ Have I missed any? I make that about 1200 brand-new hotel rooms in Aberdeen, not counting smaller developments (the likes of the new Bauhaus and Gt Western renovation) - I've never seen anything like it! I'm tempted to grump at the 'crapitecture' but some of them are actually quite good - for instance, the St Andrews development destroys nothing and actually appears to have some architectural merit. Similarly the Justice Mill development replaces only ugly redundant industrial buildings which have been a derelict eyesore for decades. So far, so good. The question is... Is this amount of development all at once a good idea? Can they all survive? Will they all be completed? We might expect the E&M development to be delayed (and the building to become a source of blight). We might, similarly, expect the Bell's Hotel development to be deferred (but at least the plan refers to a gap site). I've heard that the development company (Kenmore) at the Ibis City Wharf needed a bail-out from Lloyds in November and is now in administration. Travelodge took over the ailing (formerly 4-star) Jury's Inn development at Justice Mill. Will other developments go similarly downmarket? What effect will 1200 new rooms have on the B&B sector in the city? Surely that's the equivalent of about 100 guest houses. IMHO it would be great to see an amount of townhouses and villas across Ferryhill and the West End come back into domestic use, but I do feel for the B&B proprietors (some of whom I know.)
  19. Good stuff Frisian! Those trend lines certainly calm the nerves!
  20. Thanks for your informed perspective, most enlightening and much appreciated. Indeed, a tiny sample size to spawn an urban myth and, as such, a bit of a non-story. However, those of us who wish to see a return to affordability in family housing should embrace the power of myths. I believe that this type of report, along with others current in the press this weekend, may mark a tipping-point in public sentiment (whether true or not). Reports like this one from unbiased.co.uk (Yeah, right): http://www.unbiased.co.uk/find-a-mortgage-adviser/media/press-releases/-/page/uk-homeowners-adopting-european-rental-habits/ Money is to be made in determining what the next 'status symbol' will be.
  21. http://thescotsman.scotsman.com/scotland/128500-39desperate39-Scots-use-credit.5970324.jp It'll end in tears, sleepless nights and worse. Imagine, paying 16% (ish) plus 2.5% cash advance fee to repay a 6% (probably) interest debt.
  22. Hi Rookie, Thanks for your reply. I can't offer any particular advice. It is frustrating, isn't it? The best advice I can offer anyone is to be diverse and flexible, both in skills and investments.
  23. Potential Edinburgh buyers should head for their Boom-proof shelters: RoS Nov http://www.ros.gov.uk/pdfs/la_nov09.pdf Edinburgh up 1.5% MoM. Up an eye-watering 9% YoY. Volume up 10% YoY. Still down 7% from July 07 peak. Volume down 60% from that time.
  24. Potential Aberdeen buyers should head for their Boom-proof shelters: RoS Nov http://www.ros.gov.uk/pdfs/la_nov09.pdf Aberdeen up 4.5% MoM. Up a scarcely-believable 13% YoY. Volume up 20% YoY. Still down (just) 4% from July 07 peak. Volume down 44% from that time. Ugh.
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