JERSEY’S booming housing market could be showing tentative signs of cooling – after the cost of an average three-bed home dropped for the first time in two years amid a continued slowdown in overall price rises.
Although prices across all property types remain high and out of the reach of many Islanders, the House Price Index released on Thursday shows that the extent of the rises has slowed in the three quarterly periods up to this spring.
In the final quarter of 2021, prices were 18% higher than the same period in the previous year, but this dropped to 16% in the following quarter (January to March) and 10% in the second quarter when compared to the same period in 2021.
And the cost of an average three-bed home dropped by £45,000 to £853,000 during the second quarter.
However, all other property types once again increased in value.
5 KEY POINTS FROM THE HOUSE-PRICE REPORT: CLICK HERE
Housing Minister David Warr said: ‘It’s very difficult to make a general assumption but a correction does appear to be on the cards and the signs are the trend in rate of increase in house prices has been dropping each quarter recently.’
Even at a slower rate, prices continue to increase for most property types, with record average prices for one and two-bedroom flats and two-bedroom houses.
And the turnover of house sales was 26% higher than when it was last measured three months ago.
Deputy Warr added: ‘Today’s figures reflect decisions people took six months ago, before the war in Ukraine, the interest rate rises and the cost of living increase. We won’t be able to make any clear call on the trends until the end of this year when the last quarter figures come out in January 2023.’
Reform Jersey leader Sam Mézec urged the government to take decisive action now on the cost of buying a home to prevent a ‘housing crisis’ creating ‘terminal decline’ on the Island.
He said: ‘Jersey is facing a terminal decline, because young people are leaving the Island as they feel they have no hope for the future here. A couple on the average salary wouldn’t be able to afford to buy an average home here. I hear of lots of university students who won’t come back because of the housing costs and if they do they soon leave again when they realise they can’t afford to buy a home here.’
He added that even ‘affluent older people’ who lived in larger homes they bought long ago were now ‘terrified their children and grandchildren will leave the Island because they don’t have access to the same opportunities to buy a house as their parents did.’
Deputy Warr said they did not want anyone to feel they needed to leave Jersey in order to buy their first home and that the government was working hard to develop their response to the shortage of houses.
He added: ‘Things are on the move. We are now building twice as fast as we have in the recent past and there’s an awful lot of housing stock due to come onto the market. But the effects of the war in Ukraine, the cost of living crisis and the increase in interest rates are not baked into the figures yet. We will have to wait until next January to have a clear picture of the trends.’
THE PRICES
One-bedroom flat – £353,000
Two-bedroom flat – £536,000
Two-bedroom house – £664,000
Three-bedroom house – £853,000
Four-bedroom house – £1,329,000
