The Guernsey Residential Property Prices Bulletin has been published for Quarter 4 of 2024.
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 Local Market properties was £604,139, 0.9% lower than the previous quarter and 0.9% lower than the fourth quarter of 2023. The four quarter average was 37% higher than five years previously.
There were 190 Local Market transactions during the fourth quarter of 2024, 25 more than the previous quarter and 40 more than the fourth quarter of 2023.
The raw median price (realty only) of the 23 Open Market transactions in the fourth quarter of 2024 was £1,755,000.
The mix adjusted average rental price for Local Market properties was £2,037 per calendar month in the fourth quarter of 2024, 0.8% lower than the previous quarter, 6.0% higher than the fourth quarter of 2023 and 50.2% higher than five years previously.
Richard Hemans (pictured), IoD Guernsey’s lead on economics, commented: “The local market stabilised in 2024 after a difficult 2023, whilst the open market expanded. The cost of renting and owning a property remains relatively unaffordable in the island, which is caused by the mismatch between limited supply and strong demand. The newly formed States Housing Committee has an urgent, critical role to play in resolving this key challenge for the island.
“Local market property prices declined by 2.6% in 2024 after increasing by 1.2% in 2023. They are now 40% higher than 2019. Transactions for the full year grew by 3% to 593 properties, which is still the third-lowest total in the last decade. The market does seem to be stabilising, however, with price decreases levelling off and transactions starting to grow again. It is taking longer to sell a property, but the reduction in asking prices accepted by sellers is unchanged year on year. Furthermore, our housing market has not experienced the same level of volatility as that seen in Jersey.
“The open market enjoyed a better year in 2024 with prices increasing by 8% and transactions rising by 25% to 66 units. There was likely some benefit from the new Labour government, which could also drive more transactions in 2025.
“The cost of renting a property increased by 7% in 2024 but, the rate of increase does seem to be levelling off. Rental prices have been a major driver of inflation in the island and have increased much faster than in Jersey. The slower increase should help to moderate local inflation. The cost of renting a property in Guernsey has increased by 50% since the pandemic as the population has grown and not enough properties have been built. Rental costs consume a painful 55% of earnings, leaving little scope for discretionary spending once essential purchases and taxation is paid. Yields have improved on rental properties but remain unattractive at current levels once costs and limited capital gains are factored in, and in relation to interest rates and other assets.
“The affordability ratio for house prices to earnings has not been updated since the last bulletin, showing that prices stood at 14.1 times earnings at the end of September. With prices falling over the last quarter and earnings likely to continue to grow, the ratio is likely to have improved at the end of 2024, but it remains very elevated and higher than Jersey.
“Only 72 new property units were created in 2024 and 529 over the last five years, which is significantly lower than the target of 300 units per annum, or 1,500 over five years. 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. This imbalance is likely to drive prices higher in 2025, act as a drag on productivity, keep inflation at elevated levels and make life harder for islanders.”
