In this post our Residential Director Harry Trower takes a closer look at the recently published property price index.
House prices in Jersey are up 5%. And before anyone says it, no, this is not me just reading out the Statistics Jersey infographic like everyone else.
Because the headline is interesting.
But the context around it matters just as much. Yes, prices were up 5% year-on-year in Q2. And yes, market activity was up around 30%.
That is positive.
But one quarter does not make a recovery.
We need to look at the wider picture
This is Jersey. We have a relatively small housing market, which means the numbers can move around quite quickly depending on what actually sells in any given quarter.
So while the latest figures are encouraging, I think we need to be careful about reading too much into one set of numbers.
The market peaked in 2022. And it is worth remembering that was four years ago now.
Since then, we have had a pretty significant correction. At one point, prices were around 18% below that peak.
Even after this latest increase, we are still roughly 10% below peak levels.
That is important context.
Because when you see a headline saying prices are up 5%, it can sound as though we are suddenly back in a booming market.
We are not.
What we are actually seeing is a 5% rise after a substantial fall. Those are two very different things.
The activity figure interests me more
For me, the more interesting number is not actually the 5%. It is the increase in activity.
Because for the last couple of years, one of the biggest problems in the Jersey property market has been the gap between what sellers wanted for their property and what buyers could realistically afford to pay.
And I think that gap is finally starting to narrow. Asking prices have had to adjust.
Sellers have had to become more realistic about where the market actually is.
Because buyers have not suddenly found another hundred grand down the back of the sofa.
Affordability is still affordability. The numbers still have to work.
And when sellers price their property at a level where buyers can actually engage, things start moving.
That, for me, is where the 30% rise in activity starts to become really interesting.
It suggests that buyers and sellers are beginning to meet each other again.
This is where context becomes really important
A 5% rise after a significant correction is very different from a 5% rise at the top of an already booming market.
And a 30% increase in activity feels a lot more meaningful when you remember just how quiet parts of the market have been.
The headline alone does not tell you that. You have to look at where we have come from.
We had the peak.
We had the correction.
We had a period where buyer and seller expectations were often miles apart.
And now, perhaps, we are starting to see those two sides move a little closer together.
Are these the first green shoots of recovery?
I think they might be.
There are definitely reasons to feel a bit more positive. But I am certainly not calling a full recovery off the back of one good quarter. We need to see how the next few quarters play out.
For me, the encouraging sign is actually much simpler. Buyers and sellers seem to be finding each other again.
The market feels like it is starting to function. And after the last few years, I think that is a pretty decent place to start.