House prices back to pre-crash levels

Thursday 25 February 2016

Jersey’s house prices have climbed back up to their previous peak, which was last reached before the recent global recession, fuelled by two consecutive quarters of growth. In total, they rose by 4% over 2015, and there was also a 7% increase in homes being bought and sold.

In States figures released today, three, and four-bedroom houses have now actually topped their previous highest price. In total, 1254 properties were sold in Jersey in 2015, with an average price of £456,000.

States Statistician, Dan Edmunds, said: “We had four years of drops in a row after the economic crisis. This is the second year in a row we have seen a consecutive increase and it’s very consistent with what we saw last year.

“From 2009-2013 we saw a slow decline in house prices in Jersey, however, in the past two years, house prices have been working their way up. 2009-2013 was the first period of consistent downturn in Jersey house prices for 30 years. It follows what the economic cycle is doing.

“All kinds of property recorded an increase in price, although flat prices remained flat. Turnover for 2015 was 7% higher than in 2014, which is similar to the increase from 2013. Housing market activity is 5% higher than the previous quarter and 11% higher than one year before.”

The biggest house price rise was for four-bedroom houses, which saw a £12,000 increase from Q3 to Q4 2015, to a new high of £781,000 – an £87,000 increase from 2014.

Mr Edmunds said: “The gap between flats and houses has increased so people looking to make the step up from a flat to a house will find it a bigger jump.

“The price distribution data show the biggest increase in properties sold in the £700-900,000 mark. This could be indicative of broader economic issues, such as consistent employment and real term earnings growth.”

The statistics suggest that property in Jersey is becoming more affordable. Since 1990 the Jersey House Price Index has increased by 281% (5.5% a year) compared to average earnings growing by 190% (4.3% a year). However, since 2010 the Jersey House Price Index has only grown by 3% compared to an average increase in earnings of 11%.

Mr Edmunds added: “Property prices have been heading above earnings since the 1990s, however, in the past five years there has been a drop in earnings, but property prices have become more affordable. The gap between earnings and prices has been closing.”