Increasing supply in the housing market

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WRITTEN QUESTION TO THE MINISTER FOR PLANNING AND ENVIRONMENT BY DEPUTY G.P. SOUTHERN OF ST. HELIER

ANSWER TO BE TABLED ON TUESDAY 26th FEBRUARY 2008

Question

Would the Minister accept that the current housing problems, with significant increases in house prices, can only be solved by an overall increase in supply in all sectors of the market, that is, both rental and for purchase?

Answer

Recent figures relating to increases in purchasing and renting property in Jersey present a very mixed picture. The table below from the recent Jersey House Price Index details the price performance from the first quarter of 2002. Price s are the mean prices (£,000) for individual property types.

Thus it can be seen that over the past five years the change in the average price of houses has been notably different to that of flats:

the average price of a 3-bedroom house has risen by about a third (33%) comparing calendar year 2002 with 2007. Furthermore, the most recent annual rate of increase for this property type has been greater than seen previously during the period. Other sizes of house have also seen considerable increases in average price, with both 2- and 4-bedroom houses up by around a quarter (22% and 28%, respectively) comparing 2002  with 2007, and have  also experienced  higher  annual  rates  of  increase  most recently than  seen previously; in contrast, flats have seen lower rates of increase, overall and most recently: 1-bedroon flats have increased in average price by about 15% comparing 2002 with 2007, whilst 2-bedroom flats have seen little

change over the period, the average price in 2007 being only 1% greater than that in 2002.

The picture in the private sector rental market is summarised in the table below, extracted from the same report..

Overall, private sector rents for houses and flats have risen similarly over the five-year period: houses by 17%, comparing calendar 2002 with 2007, and flats by 15%.

Recently States Members were supplied with details of the number of homes the Planning Department has recently approved. These figures revealed that the Department approved at least 833 new homes during 2007. This is a much higher figure than in recent years.

The Housing Needs Survey, due for publication in the next few weeks, will provide an up to date analysis of the demand for homes. This will form one of the key inputs for the Island  Plan Review to ensure that proposals are brought forward to the States to adequately match supply to demand in all sectors of the housing market in the coming years.