1

paul

some good news at last. the official statistics release shows that only 4 bedroom houses increased in price in the last quarter. all other bands of property fell.

why don’t the statistics unit also include figures on median average given the skewed nature of the jersey market? breaking down the market into new build and resale property sales would also be of great interest given the influence on price when a large development comes onto the market.

i’m surprised the number of sales didn’t fall further in the last quarter, even with the number of new builds coming onto the market. however it is the third consecutive quarter sales were down compared with hte same quarter in the previous year.

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3

Marcus

I’ll try to collate some facts that you might find useful, make your own minds up what is relevant to you:

http://www.gov.je/ChiefMinister/Statistics/RPI+and+House+Prices/

1 Bed Flats Q1 £255k
1 Bed Flats Q2 £226k
11.4% fall in 3 months

2 Bed Flats Q1 £327k
2 Bed Flats Q2 £323k
1.2% fall in 3 months

2 Bed Houses Q1 £397k
2 Bed Houses Q2 £378k
4.8% fall in 3 months

3 Bed Houses Q1 £510
3 Bed Houses Q2 £506
0.8% fall in 3 months

Price is merely one number in the more detailed equation necessary to calculate value. It is proportionate to the supply and demand for desired and/or required accommodation, the supply and demand for mortgage money (debt) and the perceived value normally judged from various influences such as the people directly involved in the industry such as surveyors and estate agents, the government/state and the media.

Prices affect different people in different ways depending on your circumstances. Decide for yourself whether a general whole-market average or an average relevant to your circumstances is more relevant. And always ask yourself, what the motivation is for each party involved in predicting price and use that as just part of your calculation of value to yourself.

It is a housing MARKET – market prices fluctuate – the only thing they do with any certainty is overshoot up and they overshoot down around an equilibrium. Decide for yourself where you thing they are in any given cycle when you have to make a decision based upon them. Remember, be prudent and question everything, evaluate statistics relevant to your own circumstances and always question the price, who is telling you and what their motivations may be in providing you the information or opinion. Perhaps also consider whether a smaller, local, slightly ‘unique’ economy is more sheltered or more exposed to economic influences and whether they will stimulate more or less volatility in prices. Rapid increases in price would seem to suggest a highly volatile local property market and that falls could be just as fast. Even if prices stagnate, with inflation at +5%, they would still be falling in real terms.

If you only look at the supply and demand for accommodation as an indicator of price and value, consider this in your assesment of the market prices and where they may be in their cycle:

2002 to Q1 2008 increase in 1/2 bed Flats rental values ~+20%
2002 to Q1 2008 increase in 1/2 bed Flat sale values ~+53%

2002 to Q1 2008 increase in 2/3 bed houses rental values ~+31%
2002 to Q1 2008 increase in 2/3 bed houses sale values ~+50%

(please do double check my brief calculations)

If you buy with any mortgage, you essentially ‘rent’ the property from the bank and benefit/deficit from changes in sale prices.

If you rent from a landlord, you still pay for enjoyment of a property but do not benefit/deficit from changes in sale prices.

Unless you buy property with cash then it is your current equity and monthly mortgage payment affordability that should help tell you what value is to you. Again, determine what is most appropriate to you on a monthly and foreseeable basis and not merely on unchecked opinion and speculation.

My interest is merely to balance the debate and concentrate on facts and measurable. I both rent and own if that it is of any use in evaluating if I have any possible bias.

Lastly, a good unbiased journalist should identify and reference its source(s) and quoted opinions for the readers further evaluation of fact and encourage readers to form their own opinion.

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