The new Jersey House Price Index shows a 1.6% drop year on year compared to the first quarter of 2002.
But the alarming news for home-owners is what has happened since September – prices fell by an average 7% to the end of March.The index puts the average price of a house in the Island at £317,000.The index has been completely overhauled since it was last published in December, when, amid huge scepticism from estate agents, it showed average prices rising by 11%.More than 1,000 property transactions have been included – six times the number in the old index – from one-bedroom flats to four-bedroom houses.The compilers at the Policy and Resources statistics unit are confident that it is an accurate reflection of the market, although they stress that there is a margin of uncertainty in any survey.The new index shows that prices were still climbing during 2002 by up to 6% until the third quarter.
But between September and March they fell again by 7%.
And it is the properties surveyed at each end of the market which are being most badly affected, with prices for one-bedroom flats and four-bedroom houses both falling.The impact on each sector of the market was as follows:? One-bedroom flat, average price now £153,000 – down £3,000.? Two-bedroom flat, average price now £246,000 – static.? Two-bedroom house, average price now £284,000 – up £5,000.? Three-bedroom house, average price now £327,000 – down £1,000.? Four-bedroom house, average price now £436,000, down £10,000.The new index shows that the old methodology badly underestimated the average price of a three-bedroom house.
Instead of a figure of £292,000 at the end of 2002, a more accurate price would have been £327,000.News of falling prices will come as no surprise to estate agents, who have been talking about a slowdown in the market for the last couple of years.
The impact on one-bedroom flats has also been predicted because of the large number recently finished or coming onto the market.It is the first recorded fall in prices since 1993, when there was a year-on-year drop of 0.8%.
Since then – when the average price was £136,000 – prices have risen hugely, including a peak in 1998 when they were reported to have risen by almost 27% in one year.