First fall for 10 years seen in house price trend

Thursday 5th November 2009, 2:29PM GMT.

Trevor Cooper, director of Cooper Brouard estate agents FOR the first time in nearly 10 years, the long-term trend in house prices is falling.

Policy Council figures released yesterday show that the average house price over four quarters is now down 2.3%.

That puts the average cost of a local market residential property at £330,534 – 0.5% down from June this year.

The four-quarter figure smoothes out seasonal variations in prices.

However, Cooper Brouard estate agents director Trevor Cooper (pictured) was sceptical of the statistics because they were gleaned from a small number of sales.

‘It’s not a true reflection of the property market – while there have been fewer sales, we’ve found that prices have remained stable.’

He said the way the figures were calculated could skew the results, with the possibility of a high or low priced property throwing them out.

‘You could just have one sale that is artificially high or low and there is a limited number of sales, unlike on the mainland.’

Mr Cooper said the 2.3% drop in the four-quarter moving average was not a huge amount and in the long term estate agents were seeing more confidence in the market.

1
Frank

November 6, 2009 at 8:43 am

Perhaps someone would correct me if I’m wrong, but surely an average is an average, no matter how many sales there have been?? You add up the sale prices of all transactions and divide by the number of transactions. How can Mr Cooper say that is not a true reflection is beyond me! Just estate agent spin I guess.

My own observations from the local estate agent’s adverts over the past few months tells me that prices are certainly not stable. There are numerous properties which have had their sales prices reduced, and they are still not selling. There are also still far too many properties which are overpriced for the present depressed market.

In my opinion, prices still have further to go down before the trend is reversed, as although loans are reportedly more readily available, larger deposits are, quite rightly, required by lenders. This makes it more difficult for the market to be revitalised by an influx of buyers who simply do not have the funds available for the required deposits in the current recession.

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2
Greg

November 6, 2009 at 10:14 am

Frank, I think the way average house prices have been calculated in Guernsey has always been very suspect and Mr Copper is correct. If in one quarter there are several sales of very expensive houses, this artifically raises the mean for that quarter. However these sales do not mean the average house is priced any higher. Because Guernsey has relatively few houses sales compared to most countries, it can skew the results. Sometimes a better measurement would be the median house price.

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3
Ray

November 6, 2009 at 11:43 am

Greg
I believe the States moved from mean averages to median averages a couple of years ago.
This has had the effect of lowering the published average figures.
They also lump houses and flats together to reach their ‘unit of accommodation’ figure but it still gets headlined as an average HOUSE price

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4
Ted

November 7, 2009 at 11:30 am

However one plays around with the figures, almost everyone believes house prices have fallen. Obviously, if your livelihood depends on the housing market you will be anxious to talk it up but, for ordinary people, it can only be good news to hear that prices have stabilised or even fallen a little.

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