HM Insights

The Shetland blog: a report card for our property market

Robert Bell, Property Director at Harper Macleod, has extensive knowledge of the Shetland housing scene. Here he looks at the current state of play.

With the nights rapidly drawing in now seems a good point to take stock and review how the year has gone so far.

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I am often asked how the market is performing but that is not always easy to answer as we have such a diverse range of properties, from detached houses in the town to isolated croft houses. Also the number of properties sold is relatively small so it can be difficult to accurately detect trends, but two words sum up the market for me, resilient and mixed.

It would be foolish to say that everything in the garden is rosy however, contrary to what some people might say, there is comparatively much to be positive about.

This year to date our estate agency team has sold more properties than last year, itself a good year, showing there is definitely plenty of activity and taken overall, based on our figures, the market has performed better than valuation with around three quarters of properties selling for around or over valuation. Significant price reductions are still the exception.

But it has to be said the market is mixed with some sectors performing better than others but that's no great surprise as some properties will always take longer to sell, often with no rhyme nor reason. Negotiated deals are nowadays perhaps more likely than closing dates and subject to sale offers are increasingly common.

When considering the market it is also easy to overlook what is happening elsewhere. Like many aspects of life in Shetland we sometimes operate in a bubble and it is easy to forget the real world. Average selling times have increased but what might seem a long time to us here can be the norm elsewhere.

Compared with 20 years ago there is more property on the market but some of that is as a result of people moving more. Whilst the local perception may be that there are a lot of houses for sale, buyers moving up from south often complain there isn't enough choice!

When you consider some of the challenges facing us - austerity, oil industry difficulties, and political uncertainty - we are still quite fortunate. The market is proving to be quite resilient, just as it was throughout the 2008 financial crisis. Whilst the Scottish market struggled there was barely a blip here as evidenced by the Registers of Scotland's latest 10-year report (2007 – 2017) showing Shetland's average house price increasing by 41.3% over the period, well ahead of the rest with some areas still showing a decline.

We don't necessarily experience the extreme highs that can occur elsewhere, but then we fortunately haven't experienced extreme lows either. Compare the performance here with the market in and around Aberdeen which has taken quite a pasting.

Whether buying or selling, if you really want to know what is happening locally make sure you speak to someone who really knows the market. Be wary of the headline-grabbing statistics that often crop up. Short-term figures can often be skewed by, for example, an unusually high number of higher value sales in one period compared with another, so you have to look at the longer term for a more accurate picture.

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