The island of Jersey, located near France in the English Channel, is experiencing a run of decreasing house values, particularly among one-bedroom flats and one- and four-bedroom houses. The latest House Price Index shows prices have fallen 6% from the same time last year and are at their lowest in five years. Although it appears supply in Jersey will be able to meet upcoming demand, experts note that these simple numbers do not necessarily add up to a strong market when larger economic forces are at work. This is especially true for affordable housing on the island, which may become harder to come by if the broader economy worsens. For more on this continue reading the following article from Property Wire.
The mix adjusted average price of properties sold in Jersey in the second quarter of this year was 4% lower than in the previous quarter and down 6% compared with the same period in 2012.
The data from the latest House Price Index from the Statistics Unit means that prices are at their lowest level recorded for more than five years and it is the price of one bedroom flats and two and four bedroom houses that have fallen the most.
Also, the mean price of three bedroom houses sold in the second quarter of 2013 was the lowest recorded for more than five years. But the turnover of properties was 43% greater than in the previous quarter but 10% lower than in the corresponding quarter of 2012.
Meanwhile, a new report published by the ministry for planning and environment shows Jersey has a good potential supply of housing land and can meet current demand for new homes over the next five years as long as new sites identified in proposed changes to the Island Plan are approved.
The Residential Land Availability at January 2013 report, provides a snapshot of the latest available evidence of housing supply and demand and shows that at the start of 2013 more than 600 homes were under construction in the island and there were planning permissions in place for a further 2,000 plus homes.
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The report suggests if land identified for housing does come to fruition, there could be a buffer of up to 12% of housing land supply against demand. Planners consider this good news, saying that it will make it more likely the necessary supply of homes can be met and also means there will be more choice and competition in the market for land.
‘This report reveals the important role played by the planning system in providing a framework to enable housing targets to be met and in ensuring a supply of specific deliverable sites, sufficient to provide five years worth of housing against identified requirements,’ said deputy minister Rob Duhamel.
‘It is important to recognize, however, that the planning system cannot control the wider economic situation or the decisions of private developers in bringing forward development sites and taking up existing planning permissions. There are also no guarantees that the States will be fully supportive of my current proposals to bring forward additional sites to help meet identified needs for affordable homes,’ he added.
The report reveals that in the last five years, despite the ongoing economic downturn, an average of about 350 homes have been developed every year. By comparison, 456 homes need to be built annually to achieve estimated targets for the next five years.
It also shows that Jersey’s planning policies have concentrated the majority of new homes, some 63%, in the island’s main urban area, including St Helier and the other urban parishes.
‘Urban locations are generally more sustainable for new homes, because they involve previously developed land and offer benefits such as higher permissible density levels, close proximity to existing infrastructure, shops and services, good public transport, opportunities to regenerate run down areas and reduced need for trips by private car,’ explained Duhamel.
However, although the outlook for housing supply is positive, the report suggests that the difficult economic climate will create challenges providing affordable homes, and homes for key workers and elderly residents.
‘Despite the relatively favorable outlook in terms of housing supply, there can be no room for complacency. Constant scrutiny is required, because there are numerous factors and assumptions that underlie calculations of housing demand and supply and we need to respond quickly and effectively to any changes in circumstances,’ added Duhamel.
This article was republished with permission from Property Wire.