A tale of two islands as Guernsey property prices rise but those on Jersey fall

 
The latest real estate figures shows that prices have now increased by 4.3% in 2010 and sales have soared 40% since the first quarter of the year. There were 248 transactions, of which 231 were on the local market and 17 on the open market, an increase of 16% compared with the second quarter of 2009 and 38% more than in the first quarter of 2010.
 
The figures from the Guernsey Residential Property Prices Bulletin released by the States of Guernsey, also show that apartments comprised 21% of all local market transactions during the second quarter, compared to 27% the previous year and 23% in the first quarter of 2010.
 
The ‘constant mix’ measure, introduced in the second quarter of 2009, strips out some of the volatility associated with the changing proportions of apartments and houses.
It increased by 5.1% over the year but decreased by 2.2% over the quarter.
 
Average residential property prices on the open market tend to fluctuate more than local market prices due to the very wide ranging sale prices and the small number of transactions The report shows that median open market price decreased by 7.6% compared to the last quarter and by 4.9% compared to second quarter of 2009, to £798,000.
 
But a few miles away in Jersey property values have fallen 5% in the second quarter of the year compared with 2009 with the price of three bedroom houses falling below half a million pounds for the first time in two years.
 
The price of one bedroom flats fell 6% to $220,000, while two bedroom apartments dropped 8% to £295,000. Two, three and four bedroom house prices all dropped. But it is three bedroom properties that have suffered the most, falling below £500,000 in what is a key category for the island’s real estate market as they represent half of all residential real estate in Jersey.
 
The fall in property prices, according to the statistics unit, is very much reflective of state of the island’s economy. The recession, job losses, wage freezes and a lack of finance are all contributing to Jersey’s struggling housing market. For the last year and a half the island’s property market has been fairly stable. But this fall is the biggest in 18 months.