The ‘mix adjusted average purchase price’ for the Guernsey Local Market properties transacted during the second quarter of 2022 was £598,963, 4.5% higher than the previous quarter and 18.5% higher than the second quarter of 2021.
There were 236 Local Market transactions during the second quarter of 2022, 37 more than the previous quarter and 61 fewer than the same quarter of 2021.
The average time between a local market property becoming available for purchase and its subsequent sale has been decreasing since the second quarter of 2018.
The raw median price (realty only) of the 19 Open Market transactions in the second quarter of 2022 was £1,366,843.
The mix adjusted average rental price for Local Market properties was £1,817 per calendar month in the second quarter of 2022, 9.3% higher than the previous quarter and 14.0% higher than the second quarter of 2021
Richard Hemans, the IoD Guernsey’s lead on economic matters commented: “Guernsey’s housing market remains very strong, with the prices of both local and open market properties increasing substantially over the last 12 months at 18.5% and 17% respectively. Equally, there continues to be a reduction in the length of time it takes to sell a property and a narrowing of the gap between the final sale price and the maximum advertised price.
“The cost of renting is also rising significantly with the average property rental now 14% higher than a year ago. The volume of transactions in both local and open market properties has declined over the last 12 months but this is compared with an exceptional year in 2021, and transactions remain above pre-pandemic levels.
“The strength in the housing market is good news for homeowners who will feel more confident in their ability to spend, and the States who will benefit from document duty receipts. Similarly, consumer-facing businesses will feel encouraged that consumer demand is supported by robust house prices.
“However, the picture is not all rosy. More islanders are being priced out of the housing market. This is notable in the measures of affordability, in the form of rent and house prices to earnings ratios, which are becoming more stretched again.
“Employers will continue finding it difficult to recruit because workers coming into the island will struggle to find suitable or affordable accommodation. Higher rents will raise inflation further and put pressure on real earnings and consumer spending.
“The increase in interest rates over the next year will likely soften the housing market but the island remains an attractive place to live and demand will continue to be strong. The main issue remains a shortage of housing and therefore supply, so until more properties are built housing will remain a major challenge for the island and the source of many social and economic issues.”
Gill Mooney (pictured), who leads the lettings team at Savills Guernsey, said the quarterly and annual rental increases were reflective of their own experience. “Much like the residential sales market, rental prices continue to be supported by an imbalance between supply and demand. There are still not enough rental properties available to meet people’s needs – and that’s especially true for larger family homes,” she said.
“So long as demand continues to outweigh supply there will continue to be growth – most landlords are aware of an increase in market rentals and are keeping a close eye on market trends.
“Longer term it will be interesting to see how the cost of living and wider economic factors affect the market. You may find that landlords keep any potential increases to a minimum because they value having a long term tenant who will look after their property. Many tenants in existing tenancies are also renewing with their current landlords rather than face looking for a new home in an increasing rental market.”
Nick Paluch, director in the residential sales team at Savills Guernsey, said: “In many ways we are mirroring the situation in the UK. Successive interest rate rises and a challenging economic backdrop have led to a slightly more cautious outlook, while the last month or so has also been more seasonal than the previous two summers – with people quite understandably deciding to take a well-earned holiday.
“Consequently, a little of the heat has come out of the housing market in terms of activity when compared to this time last year – however it still remains busier than pre pandemic. When put into context there are still a healthy number of motivated buyers who are committed to a move.
“The Local Market in particular is continuing to be affected by an imbalance between supply and demand which has driven price growth. There are still a lot of people looking for property. Interestingly Q2 witnessed more than 230 transactions – one of the busiest quarters in the last five years. The properties have been available – the sales are just exchanging very quickly and buyers have had to act fast. That’s where having a good relationship and registering with an agent can be a huge help.
“Properties in the Open Market meanwhile continue to attract significant interest with a good level of viewings – particularly if they are priced sensibly and in line with the market. Q2 witnessed slightly fewer transactions than the same time last year, but prices remained robust – with strong year on year growth.
“Looking ahead, we expect the supply and demand imbalance to continue to underpin activity and – crucially – notwithstanding wider economic pressures, the lifestyle factors that attract people to Guernsey will not change. Our beautiful coastline, wonderful sense of community, rich heritage and general quality of life remain a significant draw for so many buyers.”