The Guernsey Residential Property Prices Bulletin has been published for Quarter 1 of 2025.
The Guernsey Residential Property Prices bulletin measures average price changes in residential properties purchased and advertised as being available to rent on the island each quarter and provides a headline analysis of trend prices.
The mix adjusted average purchase price for the Local Market properties transacted during the first quarter of 2025 was £580,412, 3.9% lower than the previous quarter and 3.2% lower than the first quarter of 2024. The four quarter average was 30.7% higher than five years previously.
There were 166 Local Market transactions during the first quarter of 2025, 22 fewer than the previous quarter, but 73 more than the first quarter of 2024. In the first quarter of 2020, there were 174 transactions.
The four quarter rolling average time between a Local Market property becoming available for purchase and its subsequent sale was 251 days for properties purchased in the first quarter of 2025, compared with 181 days in the first quarter of 2024 and 243 days in the first quarter of 2020.
The difference between the maximum advertised prices compared with the final sale prices of Local Market properties was calculated: the final sale price was, on average, 8.7% lower than the maximum advertised price in the first quarter of 2025, compared with 8.8% a year previously and 6.6% in the first quarter of 2020.
4.8% of Local Market purchases during the first quarter of 2025 had been built in the previous twelve months. This compares to 5.4% in the first quarter of 2024 and 5.7% in the first quarter of 2020.
The raw median price (realty only) of the 16 Open Market transactions in the first quarter of 2025 was £1,913,438, compared with £1,462,500 in the first quarter of 2024. In the first quarter of 2020 the median was £1,365,000.
The mix adjusted average rental price for Local Market properties was £2,068 per calendar month in the first quarter of 2025, 1.5% higher than the previous quarter, 8.2% higher than the first quarter of 2024 and 51.7% higher than five years previously.
Richard Hemans, IoD Guernsey’s lead on economics, commented: “Over the last 12 months the local market saw prices fall slightly but transactions recover strongly, whilst the open market enjoyed double digit increases in both prices and transactions. The cost of renting a property is still rising fast, whilst the affordability of ownership is improving although still elevated. The latest figures confirm what we already know in that we are not building enough homes, which is the key driver of price and affordability pressures. This has to remain one of the top priorities for the next States and is fundamental to our social and economic prosperity.
“Local market property prices declined by 3.1% to Q1 2025 on a rolling 12-month basis (to smooth out quarterly fluctuations) after decreasing by 0.9% to Q1 2024, meaning that the correction so far is limited. Prices are still 37% higher than Q1 2020. The number of transactions for the twelve months grew by 19.4% to 664 properties after falling 27.2% over the previous 12 months, which is still well below the average number over the last 25 years. The market is recovering well following the post-pandemic lows, whilst the price decline is modest next to the benefits of normalisation and improved liquidity. However, sales are taking longer to complete, and despite weaker pricing, the average discount to asking prices remains unchanged at 8.7%, indicating sticky seller expectations. Jersey experienced a more significant decrease of 8.2% over the last 12 months whilst transactions grew by a slightly smaller 15.4%.
“The open market enjoyed a strong 12 months with prices increasing by 22.9% and transactions rising by 15.8% to 66 units, which is just below the average for the last 25 years. This reflects ongoing inward migration, possibly accelerated by political and economic uncertainty in the UK. Guernsey’s stable environment, quality of life, and tax regime remain attractive.
“The cost of renting a property increased by 7% over the last 12 months and remains very elevated. Rental prices have been a major driver of inflation in the island and have increased much faster than in Jersey. The ongoing strength will continue to put upward pressure on local inflation. The cost of renting a property in Guernsey has increased by 52% since the pandemic as the population has grown and not enough properties have been built. The last figures from Q3 2024 show that rental costs consume a painful 55% of earnings, leaving little scope for discretionary spending once essential purchases and taxation is paid. Given that rental costs have likely outpaced earnings over the last 6 months, this metric will have deteriorated further. The average yield on rental properties now exceeds 4% after falling to 3.5% in 2023 given rents have increased and prices have fallen, and is becoming more attractive in relation to interest rates and other assets in spite of costs and limited capital gains.
“The affordability ratio for house prices to earnings has not been updated since September 2024 because an issue with the earnings data is being resolved, but prices stood at 14.1 times earnings at the end of September 2024. With prices falling over the last 6 months and earnings likely to continue to grow, the ratio will have improved at the end of Q1 2025. The loan-to-value ratio held steady at 75% in Q1 2025, indicating a healthy degree of prudence among borrowers and lenders. It is also notable that the cost and affordability of owning a home is becoming more attractive compared with renting, particularly if interest rates continue to fall.
“Only 71 new property units were created over the last 12 months and 527 over the last five years, which is significantly lower than the target of 310 units per annum, or 1,550 over five years. Over the last quarter the number of property units fell by 5. This explains why Guernsey house prices will continue to remain high and strong in the context of full employment, robust earnings, falling interest rates and a growing population driven by positive net migration. The scale of the housing challenge has been recognised, and momentum is building to address the issue, but over the short term this disequilibrium will ensure that prices remain elevated whilst transactions will remain below historic levels.”
Stuart Leslie (pictured), head of residential sales at Savills Guernsey, said: “The market since the start of the year has been somewhat of a mixed bag. The number of sales agreed is up on the previous two years and is at a level that we would expect when compared to the historic data. However, average values appear to have dipped.
“It’s rare that we see such an obvious downward trend in prices. Buyers have been a little more cautious with their budgets, but it’s also reflective of the type of properties that sold in the early part of this year. There has been strong demand for one and two-bedroom apartments, for example, alongside two and three-bedroom bungalows and houses, which will obviously be marketed at a lower price than larger homes.
“At the higher end there’s still a sense that some buyers are holding out for warmer weather, which is only likely to have strengthened in recent weeks given the economic uncertainty centred around US trade policy and the effect that’s had on global stock markets.
“We’re expecting to see the continuation of a needs-based market through the rest of the spring and into summer, where committed buyers come to the fore and demand for ‘best in class’ remains most resilient. Interest rates are also likely to continue to fall and mortgage markets will become more competitive, which should gradually bring more buyers into the market and underpin prices over the medium term.”
