Economic confidence drives housing boom
Demand for new houses shows no sign of slowing down despite the recent rise in interest rates, according to Advocate James Lawrence, a Partner at Viberts – Jersey Lawyers.
His commends were made despite concerns expressed by the Chief Minister, Senator Frank Walker, that rising interest rates could make the economy less competitive.
Conversely, with demand currently exceeding supply, the upward price trend seems set to continue well into 2007.
Traditionally, the start of the New Year is a slow time for the property sector but business has been booming, says Advocate Lawrence, with levels of interest well above normal. In fact, the only stumbling block is the lack of available property for those seeking to trade up.
"There are lots of people looking for better homes but estate agents have a shortage of stock. This is leading to increased competition and better prices for those houses which do become available," he said.
"What we are seeing is the asking price is what is being paid. If you don’t offer the asking price, you’re not even being considered because, even then, you might have several potential buyers competing for the same property. Often the final agreed price is higher than the asking price."
He reckons that the unprecedented level of demand is not only down to continued confidence in the island’s economy but also the bedding down of ITIS, the new Income Tax Instalment System.
"Everyone was quite cautious when it was first introduced but now they know exactly what they have to pay and what their budget is," said Advocate Lawrence. "The recent 0.25 per cent rise in interest rates seems to have had little impact locally and I guess we’d have to see a fairly sizeable hike for it to make a difference."