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Residential property


between the two markets? Not according to Jim Coupe. “Both islands try to manage population and have relatively low levels of unemployment,” he explains. One main difference lies in the fact


that Jersey doesn’t have an open market, as it places restrictions on the ability to buy according to income or the length of time someone has lived there. That said, the main difference according to Coupe is likely that Guernsey has more pressure on space, being just two-thirds Jersey’s size. It should never be forgotten that the


property market is a slave to the laws of supply and demand, and with a market being slowed by external economic factors and rising unemployment, Jersey must maintain the balance between the


two sides of the equation. There is little development planned for 2012, a fact that developers are finding irritating and for which they’ve blamed planning processes. Robin Sappé, however, sounds a note


of caution. “If people can’t get the money to buy, all new developments will do is drive down the value because they will dilute stock. What we’re not short of as agents is stock,” he explains. This last point is easily verified when


you drive around the island. The large number of ‘For Sale’ signs is impossible to ignore, and anyone who’s followed Jersey’s property market over the last couple of years will have noticed that a significant proportion of properties are taking time to sell. “We used to work on a six-to-eight-week turnaround from a property coming on to the market to a sale being negotiated,” says Sappé. “Nowadays, it can be six months or more.”


Providing stimulus It will come as no surprise that a slow property market is causing Jersey’s politicians some concern – and not just because of the residents’ expectations of continually rising values. With this in mind,


The outlook for Jersey


Few doubt that the slowdown in Jersey’s property market has been caused largely by external economic factors, and with problems in Europe set to continue, Robin Sappé, Director of Le Gallais Estates, is under no illusion there will be a quick fix in Jersey either:


“In my view, we’re on this plateau for 18 months to two years. There’s the stockmarket, the Euro… volatility everywhere. In Jersey we tend to think we are cushioned but we’re still vulnerable.”


Importantly, Sappé believes that people are no longer moving because they want to, instead they move when they have to in what is known as a ‘3D’ property market (the three ‘d’s being death, divorce and desperation) caused by the lack of finance available.


Aspirational sales have traditionally driven Jersey’s property market forward, and this is seen in the average move cycle, which according to Sappé has been: “four years for someone in Jersey, six to 10 years in the UK and double that in France.” Without these sales, Jersey’s market will continue to flatline but Sappé is optimistic in the longer term. “Short-term, the market will remain flat but I’m sure it will come back,” he says.


The outlook for 2012 doesn’t look great for the market as a whole – particularly for sellers. However, with sales consistent but slow and prices weaker than expected, 2012 could be a good year in which to buy, particularly as the long-term outlook remains strong.


8 PS February/March 2012


it’s natural that the island’s government would try to stimulate the property market. One of the first steps it took in 2011, also with a view to wider economic stimulus, was to clearly define the tax structure for wealthy immigrants to the islands, known locally as ‘1(1)Ks’, with a view to attracting more to Jersey. Unfortunately, the first signs are that it hasn’t worked. “Since the new 1(1)K tax structure


has come into effect, we haven’t seen any significant increase or decrease [in transactions],” says Wendy Lambert, Partner in charge of the property department at law firm Mourant Ozannes. “My view is the tax change won’t make a huge difference to an individual’s decision on whether to come to Jersey or not.” Philip Syvret, Partner in charge of


property at Jersey law firm Benest & Syvret, sees competition from Guernsey and Switzerland as a core reason why the new structure hasn’t been an immediate success. The attraction of these two lies not so much in the tax rate, but in the clarity of process that he believes is still lacking in Jersey. “What’s needed is clarity and ease of process to bring 1(1)K individuals in. If you put in obstacles, the competition will eat them up,” he says. A second attempt at market stimulus


was aimed at the other end of the market with a raising of the stamp-duty tax-relief threshold for first-time buyers. Although positive, Gill Hunt suggests stamp duty concessions could go further. “Wouldn’t it be great if there was a stamp duty moratorium or a holiday where buyers could pay back over time?” she asks. Syvret also sees the need for the States


of Jersey to do more, suggesting that the reintroduction of the States Loan scheme could be an alternative way of supplying money to the market. There’s no doubt it’s been a static year


in Jersey’s residential housing market, and it seems more of the same is expected for 2012. However, with the island’s small size and its stability as an international finance centre assured, there’s every reason to believe Jersey property remains a strong proposition for both residents and investors in the long term. n


KIRSTEN MOREL is on the businesslife.co editorial board


PHOTOGRAPHS COURTESY OF SAVILLS, JERSEY


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