PROPERTY prices have fallen dramatically during the last year.
Figures released by the Policy Council yesterday showed that average sale prices fell by 11% between March 2008 and March this year.
It is the largest decline since 1999 – when the States began using so-called median prices of property to calculate the figures.
A huge drop-off in prices achieved by flats was the biggest contributor to the overall dip.
Apartment prices fell by 17.6% and they made up 40% of the properties sold.
House prices remained solid, rising 0.1%.
Policy Council economist Andy Sloan was not surprised by the decrease.
‘It seems to be a large number but there was also a negative number of minus 5% in 2005,’ he said.
‘The small sample sizes used to calculate the Guernsey numbers makes them slightly more vulnerable. But there is no denying that house prices have clearly come off the boil.’
The average cost of a home at the end of March stood at £289,250, a 15.4% decline since the start of 2009.
Mr Sloan acknowledged that the overall drop was due to both the number of flats sold and the decrease in the value of them.
‘The way the numbers are calculated, it reflects the basket of properties sold in any one period,’ he said.
‘Sometimes there are more flats, sometimes there are more houses. I wasn’t surprised by the figures.
‘But then I follow the property market and follow the Guernsey Press and I think anyone who has looked in estate agents’ windows will have noticed a change.’
During the first three months of this year, Guernsey also saw a 26% reduction in the number of transactions – 139 in total – compared to the same period in 2008.
The number of local market houses sold in the first three months of this year stood at 78 – a fall of a third on the previous year.
Treasury and Resources minister Charles Parkinson said the island saw the market start to turn in the last quarter of 2008 and these latest figures confirmed that.
‘Some downturn is a good thing because some local market property was becoming unaffordable,’ he said. ‘Eventually the market will find a floor and prices will stabilise and start to rise again. I think a modest reduction in prices to help first-time buyers could be a good thing – but obviously we don’t want to see a rout.’
‘Unhelpful figures are nota true picture’ – Page 2
Article posted on 14th May, 2009 - 2.30pm
6 Article Comments
http://www.thisisguernsey.com/2009/05/12/investors-are-hoovering-up-all-first-time-buyers-houses-says-agent/
reported 2 days ago how it was getting harder for first time buyers with investors hoovering up the bottom of the market?
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What I can’t understand is where these figures are coming from.
If you were to look at all the estate agent websites over the last nine months for example. Any house that has been on the market has not been reduced by anything. I have seen a couple which actually say reduced, but can estate agents confirm that buyers are on average going in at 30-40 thousand pounds less on a potential buy and getting that offer accepted.
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Zaffa – what you say may well be true for flats and apartments however the article seems to indicate that for houses, prices have remained relatively stable.
I also wouldn’t pay too much regard to Estate Agents’ websites as they show the asking price rather than the agreed price – this can provide a misleading representation of property value. The agreed price for a property can be significantly less than asking price, depending on how realistic that figure was.
The truth is that you can price your house at whatever figure you like however it’s the actual sale price that counts.
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I am very cynical about these figures as they seem to vary depending on who is circulating them.
In any case, for most people who are selling their home, a fall in property prices is immaterial because they are going to have to buy somewhere else to live and the price of that new property will have fallen too.
Multiple property owners and property speculators could lose out in a falling property market – but only if they have to sell now. They are in an even a stronger position if they are buyers.
Good news too for first time buyers for whom home ownership may have seemed impossible while prices were high.
The only real losers as far as I can see are the estate agents whose commissions will be reduced.
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CD
I don’t think the Estate Agents will be too concerned if an asking price drops by £10,000.
At 1.5% commission that comes to a grand total of £150 loss.
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I watch the market quite closely as a potential buyer and have noticed in the GEP about half a dozen houses which have had asking prices reduced in the last couple of months.
Other houses are still over priced for the current market and will not sell.
Quality houses at sensible prices are still moving, but not everyone is able to be realistic about their house value, even in a slow market.
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