Over the last few years some property investors have been tempted to invest in oil rich states on the basis that, where there's oil, there are likely to be well healed prospective tenants and buyers. So it's sometimes easy to forget that you don't have to travel to the Middle East to invest in such a market - particularly when Scotland's own oil capital, Aberdeen (or perhaps it should be Aber-Dhabi?) appears to be heading for another period of strong growth. Aberdeen was, apparently, the only part of the UK where the economy actually grew during the recession. The Centre for Cities has recently rated it as the second best UK city for new business start-ups, and the eighth best for private sector jobs growth. So in this report we will look at the Aberdeen property market and its prospects for the future.
First, a look at some of the fundamentals: Aberdeen is Scotland's third largest city and the population has grown fast alongside the development of the oil industry from 180,000 in the 1970s to around 227,000 today. Latest forecasts from Aberdeen City Council suggest that the city population will reach 290,000 by 2037, the highest rate of growth in Scotland after Edinburgh. The population of the surrounding Aberdeen County is 480,000 and it is forecast to grow by 100,000 by 2037.
As recently as the 1970s, Aberdeen's economy was based on agriculture, fishing and textiles. However, since oil was discovered in the North Sea in the 1960s this has become the biggest local industry by far. The city is the largest centre for the petroleum industry anywhere in Europe. (Although it is worth bearing in mind that North Sea reserves do not even make the world's 'top 20' by size.)
There are plenty of claims about how important oil is to Aberdeen as well as to the wider Scottish and UK economies - some of which contradict and which it could be suspected are being promoted for political gains. (We won't, in this report, consider the issue of Scottish independence since the highly oil-centric economy in Aberdeen is likely to progress regardless.)