House price fall
Wednesday 12th August 2009, 3:00PM BST.
House prices went up by two per cent in the last 12 months. However, the average price fell by £20,000 between April and June
THE world might be in throes of the worst recession in living memory but Jersey has so far weathered the storm of plummeting house prices.
Figures released today actually show that house prices in the Island have, on average, gone up by two per cent in the last 12 months.
However, it was the smallest increase for four years and the news for the first half of this year is not so promising for home owners. The number of houses changing hands is a long way down on the long-term average. And the average price of a house fell by £20,000 in the second three months of this year compared to the first quarter.
Figures produced by UK estate agents Knight Frank show that, at the end of the first quarter of 2009, house prices had fallen over the past 12 months by 16.9% in America, 16.5% in the UK and 5.7% in France.
While home owners might breathe a sigh of relief, the news for tenants is not so rosy. New data indicates that rents have gone up eight per cent in the year to June and are four per cent up in the past three months compared to the first quarter of 2009. The figures are a snapshot obtained from studying the rents paid by people seeking permission from the States to rent for the first time.
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Having listened to the spin on house prices on 103 radio this morning and in anticipation of what might be included in the JEP I looked at the housing statistics themselves on line. This is the real picture. The price of a four bed house declined by £46,000 over the last three months. The price of a 3 bed house declined £25,000 and is now back at about the level of price for the start of 2008.
The annual rate of increase of the Jersey House Price Index has declined in each of the last six quarters, with the annual increase standing at 28% in Q1 2008 but then falling to 10% in Q4 2008 and to 7% in Q1 2009. The latest quarter recorded an annual increase of 2%, the lowest rate seen for four years (since Q2 2005). Spot a trend in these numbers ??
On a quarterly basis, between Q1 and Q2 2009, the Jersey House Price Index decreased by 4%, corresponding to about £20,000.
To paraphrase Bush “This sucker is going down !”
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I have a feeling that Jersey house prices are going to decline for several more quarters as I think the recession in Jersey will be shallower but more prolonged than the UK.
Jersey is highly dependent on the finance industry and I believe that this industry will spend the next few years retrenching and consolidating as it seeks to recoup the terrific losses and build up its reserves.
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I have thought for ages that propery is very overpriced in Jersey, the banks also think so too as they have reduced their lending unless the customer has a very large deposit and a squeaky clean credit record.
There is an increase every week in the amount of properties for sale in the JEP. They say there are 3 reasons for house sales, death, divorce and debt. I would guess there are a fair few people out there regretting their decision to re-mortgage their houses to buy those BMWs and Mercedes.
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Because of the tightening on borrowing the cash cow of housing has now ceased. Maybe it is a good thing and we may now see more realistic prices going forward.
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i am with you on this one ,( overpopulated).
was driving thru tow to five oaks the otherday.
aquilla road, thru rouge bullion and up stsaviours road . twenty plus estate agent placards. good game for the kids in the back of the car count the number of for sale boards, from a to b.
the cost of a home (not a nice little earner)is now beyond belief.
i see that the unwanted copy of overpriced homes and rabbit hutches has arrived thru the letterbox.
a big wiff of negetive equity would have many out of here in droves.
a couple of rentals in the post tonight.
a snip at £2000 plus per quarter, just make sure you are sterille and get your pet rehomed or put down before living there.
just to note property monthly, no longer has the monthly sales thru to royal court anymore,
used to use this as a guide to what is selling.
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Overpopulated – “I would guess there are a fair few people out there regretting their decision to re-mortgage their houses to buy those BMWs and Mercedes”
You must have some very shallow friends or acquaintances because no-one I know would re-mortgage for a car!
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Judging by the amount of BMW & Mercedes not to mention ugly MINIS on the road it appears that most of the poulation are shallow.
Did i mention Porsche & Audi.
Perhaps its time to give that BMW X5 up as the old adage of “as safe as houses” sems to have all but dried up.
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In the UK you can still buy a 2 bed house for 40,000 wish you could say that here then we would all have our own homes.Hope it gets worse and worse here.
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If prices continue to drop at £20,000 per quarter, they will be affordable in about three years.
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Sorry to disappoint you Cathy but one of the factors driving the purchase of big ticket items like cars, boats etc in the island over the last few decades has been the ease with which finance houses have been willing to extend substantial loans against domestic property.
Some people have even borrowed extensively against their houses to buy shares that have substantially fallen in price since purchase.
I am not aware of any statistics on the level of personal debt in the island but I bet it is at the same level as the UK average or even substantially more.
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I was brought up in Jersey, then left to join the armed forces and returned to the Island in the 1980s. I bought a house that cost me £46,000 and nine years later sold it for £132,000 on buying a house for £180,000. Eight years later I sold it for just short of £400,000, paid off my mortgage and bought a farm with 30 acres in the U.K. for £295,000.
I would love to have remained in Jersey, but it is just too expensive – who knows maybe I’ll be able to sell my farm…the last I heard it was worth over £500,000…and now I’ll be able to afford a bedsit in Jersey.
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Ha ha ha! Jersey is going down, about time too! serves you right for the years of stealing taxes from the UK, this is a victory for the working class men and women of the UK.
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About time – the Market is well overdue a correction. I would expect the price of the average 3 bed house to drop to at least £250,000 over the next 2 years. The Market could easily drop 30% without leaving many people in negative equity.
Psychologically people are still trying to sell property at prices commensurate with a low interest environment, easy availability of credit and the Bank’s willingness to lend multiple times joint incomes. Frankly this has fed a glutony of unrealistic and unsustainable expectations with regards price.
It is outrageous that the States have allowed the so called professional estate agents and valuers to talk the Market up so much that there will now be an inevitable, and for some, a very painful correction.
The only possible way these prices could be maintained is if housing qualies are reduced further (possibly to zero) and if that happens my friends Jersey is finished.
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Overpopulated: ” have thought for ages that propery is very overpriced in Jersey, the banks also think so too as they have reduced their lending unless the customer has a very large deposit and a squeaky clean credit record.”
Isn’t that exactly the same everywhere else in the World right now?
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I always found the Jersey obsession with housing one of the most unpleasant character traits of people here. A strong dose of negative equity might not be such a bad thing.
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mike f(13)i hope it happens, the price drop that is.
no to a further drop in quallies, just to keep the market up.
rob roy(15)housing and greed are unpleasant traits for both local born and not local born.
i do fear for the future of both local young and those whose parents which are here now and have yet to aquire the right to live in a home of their own.
where will these future generations work and live?
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Wot total nonsense half these comments are with little relation to reality. Seems like some take pleasure in off the wall fantasy.
The finance industry is doing very well – making not Millions but Billions. We have an island with limited land and houses are in short supply. The credit restrictions are driven by UK lending policy, and will come back to a more happy medium as the banks try to make money in the market and have to compete, without lending there is no return.
This is a great place to live which is admired and desired by many. We haven’t seen mass unemployement. Sure a couple years of growth will come off the price if you need to sell – but the vast majority will not.
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The ready assumption that things will continue exactly as they have for the past fifty years with huge growth in the price of houses on the back of a booming finance industry is precisely the assumption that has got us into this mess.
Looking back only a few years, the assumption in the States was that we had ‘money coming out of our ears’.
Every generation of estate agents and bankers seem to have to learn the hard way that ‘trees do not grow to the sky’. In other words markets in shares, property etc cannot continue rising indefinitely and sometimes have a nasty habit of falling precipitately when the factors pushing them upwards falls away.
Obviously the finance industry in the Western world and Jersey in particular will not disappear overnight. Rather growth will slow and then a gradual process of decline will start as Hong Kong, Shanghai, Beijing etc start to assert their strength.
Just like the cod fishing industry in Jersey or the motor and bulk chemical industries in the UK took decades to decline to nothing or just pale shadows of their former selves, Jersey finance could spend half a century fading away.
The States and islanders have plenty of time to start to plan for a future with a smaller finance industry but it will come to pass because of the factors driving the world economy
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eh? 17.
You are either trying to sell a house or have recently bought one and regret the price you paid!
The only other people that talk like you are Estate Agents and their employees.
I actually know people who are trying to sell their houses and others who are looking to buy…the former have lowered their expectations and the latter are holding on until they do so even more.
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The first comment by AI does not reflect the true picture. I’ll stick to 4 bed houses. Firstly the number of sales is historically very low and individual quarters cannot be relied on. AI is correct that 4 beds fell by £46k this quarter (to £712k). But they rose by £130k the previous quarter!! (from £628 to £758k). I suggest you look at the trend which is that 4 beds are steadily rising (around 3.4% per quarter since 1/1/07) and the current figure of £712k is a little over the trend from 1/1/04 to date and somewhat under the trend since 1/1/07. The trend is very definitely up. See http://www.gov.je/statistics for the stats and look at the graphed trends.
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19. Born Warrior
Nope wrong all counts, not selling and have a LTV of less than 35% if that came 45 or 55% it wouldn’t bother me, don’t work as an estate agent. Just believe based on a 9×5 island with good income (and know people trying to move here, and know the business I work for is ahead on 2008 targets) prices aren’t going as far south as some on this board would like to dream about.
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17. eh? said ‘The finance industry is doing very well.’
The finance industry in Jersey is highly dependent upon deposits – I can assure you that it isn’t doing very well – check the official Jersey figures if you don’t believe me.
Like someone else said – I also think that the industry in Jersey will contract over the next few years – as to how far I don’t know – 10 or maybe 20%.
I wouldn’t be surprised if more redundancies are announced in the coming few months before Christmas.
In turn – my guess is that fewer people will be posted to Jersey – which in turn will have a detrimental impact on the economy & also house prices.
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I personnally think the housing prices will come down. The market place at the moment believe it will therefore aren’t buying and this lowers prices to buy but raises the rental market. people can’t sell so rent to those who won’t buy as they wait. Comment number 1 is spot on.
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‘Firstly the number of sales is historically very low and individual quarters cannot be relied on.’
You can say that again!
Individual quarters in a tiny housing market like Jersey’s are certainly not to be relied on.
But one thing you can guarantee is that last quarter in which the price declined will be underplayed while if the prices tick up sharply in the next quarter this will be hailed as ‘green shoots’ and a sign of certain recovery.
Things are hard out there. Almost all of the Jersey motor traders are selling cars at cost price to make turn over and I know of plenty of motor yachts that are open to any reasonable offer.
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what ever you all say, houses are over priced.
wake up and smell the coffee.
in the future do you think we should see the 500,000 one bed flat, be cause if we keep paying these daft prices this is where we could be whilst your kids sleep in the gutter.
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ey?
(Taken from the article)
…it was the smallest increase for four years and the news for the first half of this year is not so promising for home owners. The number of houses changing hands is a long way down on the long-term average. And the average price of a house fell by £20,000 in the second three months of this year compared to the first quarter…
This article puts it clearly and confirms the down trend.
I have no doubt that you know people who wish to move to Jersey, but there’s a housing qualifications system and “newcomers” (with few exceptions) are not allowed to buy.
And I wasn’t talking about dreamers, I was talking about people who are trying to sell and according to them “it’s not a Seller’s market”.
I was talking about “Mr Average” who wants to buy but is reluctant to do so because he is afraid of “overnight” redundancy.
There’s a recession out there even though some people choose to ignore it, job security has flown out of the window so people are waiting to see what happens…and I don’t blame them.
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Re 24. In addition to this post of common sense, we all know people who have lost their jobs (including in finance). We all know people who have not received pay increases. We all know people who are having to work very long hours and weekends to cover where people have ‘been let go’.
Many people are now on short term contracts so their employment position is not secure.
Then we have our 200,000 per year unsackable civil servants ……………….
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No matter how much house prices fall there will still be a large number of families who can only dream of owning their own home.Jersey house prices are just too extreme and way out of the reach of many.
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The number of houses on the market and the number of buyers has been stable for many years.
A 5% fluctuation in the number of houses for sale or number of buyers would devastate the house prices.
In an unstable economy it is madness to think there is a safe place in property.
Statistics can be made to say anything, when the market cracks the clever money has already moved on.
Can we please have some statistics on hp reposesions as this would be a good indication of how our Island is doing.
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Let me say that I know of no one who has had a house re possessed in Jersey, ask your friends I bet they don’t either, secondly stop reading the quarterly figure the annual figure (more reliable as it involves many more transactions) is saying a 2% rise in prices, so in a world in economic meltdown Jersey prices have held, sure in real terms if you bought mid to late last year you would have lost but year on year we are doing better than most.
The doom mongerers on here need to understand that these are facts, not manipulated to say what we want to hear but calculated from the same information year on year.
Now jsut before you all cry house owner etc I rent my home, because I think that house prices in Jersey are absurd, however facts are facts and our economy is holding up, I haven’t had a pay rise in 4 years, and everything has gone up so I know what hardship is, but my opinions are based and the facts and not my emotions, some of you ought to try it!
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ha ha Fun boy three you will laughing on the other side of your face when your prices and taxes go up as a result. Serve you right too for being so narrow minded!
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As a far as I know no one has had their house repossessed in Jersey but I know of two ex home owners who have been pushed in to forced sales by circumstances.
The houses has been sold, as have the posh cars etc.
They are now back in rented flats carrying substantial debts and hoping that their now three monthly contracts will be renewed.
They have a strange relationship with their employer. Short term contracts but if they were ended they could vanish leaving a few few hundred K of debt on the bank’s books.
Not that a banker, lawyer or accountant would ever clear off from the island leaving their debts unpaid…
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Pip, Antipodeans appear to have a habit of clearing off leaving unpaid taxes. We used to make a token attempt at chasing them, but it was largely unsuccessful.
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I guess if they are having trouble paying the mortgage, they could park a couple of non-qualifieds in their box room and charge them an exorbitant rent. No sharing of the living room or cooking facilities mind you! Isn’t that the Jersey way?
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