The Q4 property statistics were released today and in short – they are exactly what was expected. In this blog post Harry, our Residential Director, explains what it means for the local property market:
While Statistic Jersey provide a very good summary of what has happened it is always nice to measure it up against what we are seeing in our office.
Again, Stats Jersey have started by putting it all into context. Mainly that 39% of ALL transactions in 2023 have been new developments. Which is a significant number. In order to paint a truer picture we have to remove these from the conversation. This also includes the amount of investment purchasers (20%) as again, I’d hedge my bets that a significant amount of them bought in these new developments and were signed up long before 2023 prior to the additional 3% stamp duty being implemented. Removing the above puts housing activity down 58% on 2022…with them it is down 43%. Which in it’s own right is a pretty poor stat. In fact it was the lowest turnover since 2002.
Also, removing the new developments adjusts the price decrease in property from 3% to 5%. While not a huge difference it correlates well to what we have been seeing where vendors are now accepting offers in the 4%- 6% range off asking. Not the 20% some people were predicting but a slight drop…
While prices per property type have fluctuated up or down. My opinion is that the market activity is again the most important stat to reflect the current property market. There simply has not been enough property transacting.
Affordability
A worrying note in the report is affordability. The fact that average earners cannot afford anything over an median priced one bedroom apartment makes poor reading. Our new housing minister is already saying that there is a housing crisis. I disagree. There is an affordability crisis caused by relatively high interest rates and high property prices. There are plenty of houses for sale (1392 on places.je as of writing this) not to mention new Andium properties, existing Andium stock that comes onto the APP scheme and developments in the works. In 2021, at one point there was only 220 (ish) properties available on the open market. That was a housing crisis.
2024
This year will hopefully see drops in the base rate and affordability will come back. We will likely see a drop in property prices to reflect this but it will not be catastrophic. It will drop to reflect the new affordability on mortgages. This will not be a sudden drop but will happen overtime as rates ease (hopefully)…
In all, my feeling is that we are through the worst for housing market activity and that 2024 will be a return to at least a better and more fluid market but it will be very unlikely that we will ever return to 2020 – 2022 numbers.
