THE number of homes being sold in Jersey has plummeted in what the Housing Minister has described as the most ‘dramatic’ slowdown since the crash of 2008.
However, the cooling of the once booming property market does not necessarily spell good news for first-time-buyers, with high interest rates and inflation continuing to make it difficult to get onto the housing ladder.
Housing Minister David Warr said there was ‘still a good degree of correction to come’, after the latest House Price Index for the second quarter of this year showed that the average cost of a home was £666,000 – down £20,000 on the same time last year.
The report also showed that all types of house saw their mean price decrease compared with quarter two of last year.
Market activity has also dropped – with the turnover of properties 42% lower than in the same period last year.
It would have been even lower (62%) but the level of turnover was inflated by completions of new developments, which also skewed the average prices for flats.
This was because the new developments were largely sold off-plan before increases in the Bank of England base rate had impacted the market.
Harry Trower, a director at Broadlands, said the turnover figure was‘the most important statistic’ in the entire report.
‘We are probably seeing even lower transaction numbers than the last quarter but we won’t know until the data is out – but it won’t have the new builds such as Horizon influencing the figures, so you would expect a truer reflection of the current market.’
He added that market transactions had ‘fallen off a cliff’ since the start of the year. ‘There is still an appetite to buy a house, it’s an affordability problem,’ he continued, noting that, if the Bank of England base rate started to come down, market activity would hopefully ‘start to pick up again’.
Almost a third (28%) of properties sold were not bought as a ‘main residence’, meaning a significant chunk of the sales were made up of second homes or buy-to-let investments.
Deputy Warr said: ‘What is interesting is the speed of the correction – we have seen a dramatic turn in the housing market in just a few quarters.’
He added that the ‘most recent’ slump he could compare the figures to was the housing market crash of 2008.
However, Deputy Warr acknowledged that inflation and interest rates remained high.
‘Clearly one of the issues still is that people have had to borrow a lot of money and it has become harder for them to get on the housing ladder.
‘As we continue to see very low numbers of transactions taking place, we should expect to see further downward change in prices over the coming months, reflective of the adjustment already being seen in advertised sales, and feedback I have received from the industry.
‘My greatest concern at this time is the low level of activity being seen in the market, which I appreciate will be particularly frustrating for those who are trying to move home, and for those in the property sales industry.
‘It is not the end of the road as there is still a good degree of correction to come – I don’t think there is any doubt about that.’
Latest prices…
One-bedroom flat
£356,000 (was £353,000 in the second quarter of 2022)
Two-bedroom flat
£558,000 (was £536,000 in the second quarter of 2022)
Two-bedroom house
£621,000 (was £664,000 in the second quarter of 2022)
Three-bedroom house
£821,000 (was £853,000 in the second quarter of 2022)
Four-bedroom house
£1.297m (was £1.329m in the second quarter of 2022)
