Thursday, 27 June 2019

Longest losing streak in history for Chichester property prices



Property prices in Chichester have now fallen for six straight months in a row, which is the first time that’s ever happened since Land Registry records began in 1995. Even during the ‘credit crunch’ it only made it to five months in a row before an uplift (however small and/or temporary) was seen. Fortunately, the overall price drop isn’t as substantial as it was back then, but clearly this continued downtrend does not bode well for property prices in Chichester.

The average sale price in Chichester in April last year was £381,762, which was 3.5% higher than the year before. So things were still looking rosy then and prices continued rising until October 2018, when they peaked at £398,671. As of April 2019 though, the average sale price in Chichester stands at £365,101, which means they’re down 4.4% compared to a year ago and have now dropped 8.4% from their record high following six months of constantly falling prices. Unless things turn around quickly then, we’re looking at the pace of annual decline accelerating in the coming months.

Interestingly, whilst all types of property in Chichester are selling for less than they were a year ago, there is a distinct pattern that shows flats are performing worse than houses, with the more expensive properties fairing the best:

Detached houses: April 2018 - £596,504 vs April 2019 - £573,537 = down 3.8%
Semi-detached houses: April 2018 - £359,638 vs April 2019 - £345,314 = down 4.0%
Terraced houses: April 2018 - £315,033 vs April 2019 - £201,825 = down 4.2%
Flats: April 2018 - £209,524 vs April 2019 - £196,724 = down 6.1%

Property prices in England as a whole are still 1.1% higher than they were a year ago, but they too have been trending downwards over the past six months, so I expect the national press will soon be reporting that house prices are down year-on-year. It’s interesting to see though that flats are the anchor in the national market too, having dropped in value (unlike houses of all types). This has led to commentators proclaiming that first-time buyers are skipping the stage of buying a flat and instead are going straight for a house. The suggestion here is that flats are ok for renters, but less desirable for those looking to buy a home of their own.

This is something I’ve long suggested and have always said that whilst flats will rent well, when it comes to exiting the market typically flats have not kept up with houses when it comes to capital growth. In the past 10 years this is true both nationally and locally, with house prices in Chichester increasing 57% in the past decade, whilst flats have ‘only’ increased by 36%.

So what of the coming six months? Well, I expect property prices will continue to level off both in Chichester and the UK. The annual decline will sharpen though as we get closer to comparing the current figures to the increasingly stronger figures of last Summer/Autumn. I also expect flats will continue to lead the downtrend, with houses showing greater resilience to the stormy market conditions.


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