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Despite the first annual price drop in a decade, housing was "significantly" less affordable last year – as higher mortgage interest rates "outweighed" the price decrease.
Released this morning by Statistics Jersey, the latest House Price Index figures showed that 2023 saw the second biggest drop in house prices since at least 1986.
The ratio of average prices against household income in Jersey was lower than 2022 for all property types but this was "outweighed by higher mortgage interest costs", resulting in worse housing affordability overall.
Pictured: The key figures for 2023 reflected the significant drop in property turnover recorded in recent quarters. (Statistics Jersey)
- In the final quarter of 2023, the average cost of a home in Jersey stood at £636,000 – down from the figure of £681,000 recorded in the previous quarter.
- Overall, the average price of a home in the island last year was 3% lower than in 2022. This was the first annual decrease in price since 2013, and thee second biggest price drop since at least 1986.
- All property types saw decreases in their annual median price, while advertised private sector rental prices were also slightly (1%) lower than the year before.
- The major slump in property sales seen towards the end of last year alleviated slightly in the last few months with the sale of newly built units, but the overall turnover of properties for 2023 (843) was 43% lower than it was in 2022 – the lowest annual turnover for at least two decades.
- The overall decrease in turnover was particularly driven by three- and four-bedroom houses, where sales for both were down by 55%.
The ratio of average prices against household income in Jersey was lower than 2022 for all property types.
However, the report noted that this was "outweighed by higher mortgage interest costs", resulting in worse housing affordability overall.
Pictured: Housing affordability based on the household income of working households from 2002 to 2023. (Statistics Jersey)
The issue of increased mortgage rates came to the fore earlier this year, when Jersey Consumer Council Chair Carl Walker questioned why some Jersey homeowners were paying hundreds of pounds more in repayments than if they were with their bank's UK counterparts.
"Overall, housing was significantly less affordable in 2023 compared with 2022, due to the increase in interest rates. This is despite the increase in household income (based on the change in average earnings) being 7.7% and property prices decreasing by around 3%," the report explained.
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