Housing in Jersey is now so expensive that a household with an average income would only be able to pay off a mortgage “affordably” on a one-bedroom flat, new statistics have shown.
The median price of what was once considered a traditional ‘family home’ - a three-bed house - now stands at £835,000, meaning it would only be “affordable” if nearly four people working full-time jobs pitched in with the mortgage.
The findings came in the latest House Price Index report, published by Statistics Jersey today.
They showed that the average cost of a home in Jersey was £691,000, higher than the £623,000 recorded in the same quarter in 2021 – but lower than the record high of £709,000 recorded in the third quarter of 2022.
They also showed that the turnover of properties was 12% lower in 2022 than it was in the last quarter of 2021.
Pictured: How property in Jersey has become less affordable over the years.
While sales of one-bedroom flats went up by 22% on an annual basis, sales of all other property types decreased by 15% or more.
One of the most stark findings was how the affordability of buying a home has continued to decline.
Statisticians define affordability as a situation in which mortgage payments consume no more than two fifths of net income, with the purchaser servicing a 90% mortgage at a variable interest rate for a term of 25 years.
“…Overall housing was significantly less affordable in 2022 compared with 2021, due to the increase in interest rates and the increase in household income (based on the change in average earnings) being lower than the increase in overall property prices,” Statistics Jersey found.
Any property larger than a one-bedroom flat would be “unaffordable” to an average household, the report said.
In 2021, a two-bed flat officially became unaffordable for the first time since 2008.
In 2022, a median-priced two-bedroom flat (£515,000) was only affordable to a household with annual gross income of at least £104,000 and a net income of at least £78,000. The price of a two-bedroom flat would have to decrease by £70,000 to be considered affordable to an average household.
The report also showed that houses of any size have not been “affordable” for islanders on average salaries at any point in the past 20 years.
A median-priced three-bedroom house (£835,000) was only affordable to a household with an annual gross income of at least £169,000 and net income of at least £126,000.
The gross earnings of 3.8 full-time workers would be needed to service a mortgage affordably on this type of home.
Broken down by home, the average house prices listed in the House Price Index compared to the previous quarter were as follows...
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