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RESEARCHJERSEYRESIDENTIAL MARKET INSIGHT 2018PRICING AND TRANSACTIONSECONOMYHIGH VALUE RESIDENCY

MARKET UPDATE 6.5%Annual change in property pricesin Jersey (to Q2 2018) 883,000Average price for a 4 bedroom house(Q2 2018)84%Increase in sales with a value of atleast 1m (H1 2018 v H1 2017)34Number of High Value Residencyapprovals in 2017, double thenumber in 201620%of approvals for High ValueResidency were to individualsaged between 25-402Residential property prices in Jersey have been risingsince early 2015, the longest period of sustainedannual price growth since 2009.The growth in pricing has beenunderpinned by robust economic andemployment growth on the island, as wellas an expanding population. Averagevalues now stand at 480,000, 12% abovetheir previous market peak, according todata collated by Jersey Statistics.While strong house price growth in recentPrices rose by 6.5% in the year to June2018, the most recent data shows.Residency programme.As well as an active local market,Jersey’s property market is driven bythe island’s ability to attract individualsfrom the UK and beyond. A favourablebusiness environment, as well as ahigh quality of life are two factorsunderpinning this demand.backed organisation charged withNet inward migration has averaged 1,300people per annum over the last threeyears, taking the total population on theisland to an estimated 105,500. Populationgrowth is expected to continue, helpingto support demand.more detail on page 5.There has also been an increase in activityin the market in recent years. Figures fromJersey Statistics, analysed by KnightFrank, show that more than 800 propertiestransacted in the first six months of 2018,the latest available data, in line with thecomparable figure for 2017, but 16%more than the same point in 2016.A more detailed look at the data revealsvariations in activity levels depending onproperty value, with notable growth seenat the top end of the market.The number of deals completed with avalue of at least 1m between Januaryand June increased by 84% year-on-year,and have accounted for more than 10% oftotal activity so far in 2018, up from 5.6%the previous year.There were 19 sales of homes valued atbetween 1.5m and 2m over the sameperiod – an increase of 73%. Sales ofhomes priced above 2m increased 46%.years will have pushed some propertiesinto the higher thresholds, another factorthat has contributed to rising salesvolumes above 1m has been a rise in thenumber of people applying to move to theisland through Jersey’s High ValueIn 2017, Locate Jersey, the Governmentpromoting the island internationally andassisting individuals looking to move,approved 34 applications – double thenumber in 2016. Kevin Lemasney,Director of High Value Residency atLocate Jersey, discusses this rise inUnder the rules of the programme, thosewho qualify must buy or lease property inJersey valued in excess of 1.75 million.This recent inflow has helped bolstersales at the top end of the market.Jersey has many lifestyle factors whichdraw residents from all over the UK andfurther afield to join the local community.Additionally, good transport links toLondon and Europe, and a favourable taxsystem act as a draw.High-net-worth individuals who qualify forthe scheme are taxed at 1% after theyhave paid an annual minimum taxcontribution of 145,000. Successfulapplicants are granted ‘entitled’ status onthe island which is necessary for thosewishing to buy a property. There is aseparate system in place for non-localswho are “essentially employed”.The future performance of Jersey’sproperty market, especially for themarket of 1m homes, will be closelylinked to the island’s appeal to high networth individuals.Please refer to the important notice at the end of this report

RESEARCHFigure 1Figure 2Residential transactions by price bandup to 700,000Residential price growth comparedIndexed 100 Q1 2002H1 2016H1 2017H1 2018350270300250220200150100170500120Up to 200,001 200,001 - 300,000 300,001 - 500,000 500,001 - 700,000Figure 2a70 700,000 to 2m 17Q22018H1 2016H1 2017H1 2018908070Jersey60Source: Knight Frank Research50403015 MILESOF SANDYBEACHES84.9% OF STUDENTSACHIEVEDA*-C GRADE (2018)105.5k311 DAILYFLIGHTS TOLONDONISLAND-WIDE4GNETWORK1,20020100 700,001 - 1,000,0001% 1,000,001 - 2,000,000Greater than 2,000,000 4.11bn52,170GDP in 2016, up 1%on an annual basis(States of Jersey)Total employment(States of Jersey)Population estimatefor 2017(States of Jersey)Net inward migrationto Jersey in 2017(States of Jersey)4713,300 1in every 20 14bnFinancial centre ranking(Z/Yen Index out of 100 locations)Financial servicesemployment, 22% of total(States of Jersey)of foreign investmentin the UK comesvia Jersey(Jersey Finance, 2016)Added by Jersey to theUK economy and almost250,000 jobs supported(Jersey Finance, 2016)4

RESEARCHJersey’s new generationKevin Lemasney, Director of High Value Residency at Locate Jersey, explainshow there has been a shift among new arrivals to the Island.The number of enquiries aboutrelocating to Jersey in 2017 via the HighValue Residency scheme increased bynearly a third compared with 2016. Intotal 34 applications were approved,and 20 individuals had relocated by theend of 2017, a record for the Island anddouble that of the previous year.As the number of enquiries andapprovals has risen, we have seen amarked change in the demographic ofthose moving or looking to move to,the Island, with a swing towardsyounger applicants, often entrepreneursor business people seeking a betterwork/life balance.Around 20% of applicants in 2017 were25-40 years old, 60% between 41 and 59and 20% over 60. Three years ago only5% fell into the younger category,meaning that the demographic of thoserelocating to Jersey is very different froma decade ago.Lifestyle is an increasingly importantfactor in the relocation decision makingprocess. Jersey has a temperate climate,beautiful scenery and beaches, is safe,with good education and healthcaresystems and an excellent stock of highquality homes, making it for some moversequally as important as the favourablebusiness environment.Jersey is well connected with an islandwide 4G network and 100% of broadbandcustomers connected to high-speed 1GBFIGURE 3Countries of origin for HighValue Residency approvals2013-17fibre, as well as good flight connectionsto the UK – 11 daily flights to London.Changes to the political landscape inthe UK, uncertainty over Brexit andchanges to the rules governing‘non-dom’ are contributing reasons formoving, especially since the clearmajority of applicants are UK passportholders. The fact that Jersey is outsidethe EU but has ongoing strong linkswith Member States and the UK, alsomakes it an attractive option.Equally, driven by geopoliticaluncertainties elsewhere and a changingenvironment in larger cities, a mix offamilies from other centres aroundthe world are showing an interest,for example those from Australia,Singapore and Germany.FIGURE 42013Number of High Value Residency approvals20142020151420Source: Locate MANYHONG KONGREST OF WORLD201720161710*Source: Locate Jersey *Oct (2018)5

Expert ViewAimee Sinclair-Horgan, Partner at Wilsons KnightFrank, gives her take on the island’s property market.This rise in activity has been supported byan increase in the number of good-quality,well-presented homes being offered forsale – whether it be rural farmsteads,country manors, new-build houses or towncentre apartments.As this report notes, the residentialproperty market in Jersey has performedwell over the last few years.Both the prime and mainstream marketshave witnessed strong price growth as aresult of a shortage of new supply, anexpanding population, a strong economyand a robust employment market.This has been particularly evident in theprime market, where we have agreed anumber of noteworthy deals over the last12 months. The official figures confirm ourview, with the numbers pointing to anotable pick-up in activity for homes valuedat between 1m and 2m, and 2m .“ A FAVOURABLE BUSINESSENVIRONMENT, ASWELL AS A HIGHQUALITY OF LIFEARE TWO FACTORSUNDERPINNING DEMAND.”Oliver Knight, Residential [email protected] some of the strongest demandwe are seeing is for property for thefirst-time buyer market, and homes valuedat up to 1m. Properties located close togood schools, shops, restaurants andother amenities remain in highest demand.Rising demand will help to supportpricing, a trend that we expect willcontinue into 2019.High value residencyTo qualify as a high value resident, applicants are required to meet the following criteria: your residencyin Jersey will benefit the Island in some way (usually business or socially); annual worldwide earnings inexcess of 725,000 per year, with the minimum tax payable on income of 145,000 per year. I f you aregranted ‘entitled’ status, you may buy or lease property in Jersey as your main place of residence. ThePopulation Office normally requires that you buy or lease a high value property. For more informationplease contact Locate Jersey.Get in touchKnight Frank Research providesstrategic advice, consultancy servicesand forecasting to a wide range ofclients worldwide including developers,investors, funding organisations,corporate institutions and the publicsector. All our clients recognise theneed for expert independent advicecustomised to their specific needs.If you’re thinking of buying in Jersey, or would just like some property advice,please do get in touch, we’d love to help.Important NoticeJames CrawfordKatie [email protected] Sinclair-HorganSimon nce.com 44 20 7861 106501534 877 977 44 20 7861 5144 44 20 7268 2581Knight Frank Research Reports are available at KnightFrank.com/Research Knight Frank LLP 2018 – This report ispublished for general information only and notto be relied upon in any way. Although highstandards have been used in the preparation ofthe information, analysis, views and projectionspresented in this report, no responsibility or liabilitywhatsoever can be accepted by Knight Frank LLPfor any loss or damage resultant from any use of,reliance on or reference to the contents of thisdocument. As a general report, this material doesnot necessarily represent the view of Knight FrankLLP in relation to particular properties or projects.Reproduction of this report in whole or in part isnot allowed without prior written approval of KnightFrank LLP to the form and content within whichit appears. Knight Frank LLP is a limited liabilitypartnership registered in England with registerednumber OC305934. Our registered office is 55Baker Street, London, W1U 8AN, where you maylook at a list of members’ names.

property market, especially for the market of £1m+ homes, will be closely linked to the island’s appeal to high net worth individuals. 6.5% Annual change in property prices in Jersey (to 2 2018) £883,000 Average price for a 4 bedroom house (2 2018) 84% Increase in sales with a value of at least £1m