Guernsey’s property markets of the last 12 months have continued to be defined by strong demand versus restricted supply. But coming off the back of a record breaking 2021 – and in the face of significant political and economic uncertainly abroad – it’s perhaps unsurprising that activity levels in terms of the number of transactions cooled ever so slightly.

The heady heights the markets experienced at the end of the pandemic were always going to be unsustainable over the longer term and we are now experiencing what you might describe as more ‘normal’ market conditions. 

That’s not to say the markets have been struggling. Almost £900m worth of property changed hands last year – the second highest value of property conveyed in the time these figures have been recorded. Although some £100m lower than 2021, it was still £100m higher than the third-highest year (2020).

Interestingly, according to the latest States of Guernsey property bulletin the number of sales above £1m also increased at the end of last year – possibly indicating less reliance on borrowing for buyers at the higher end of the market.

STATES OF GUERNSEY QUARTERLEY PROPERTY BULLETIN - HEADLINE FIGURES

• The mix adjusted local price for Local Market properties was £638,267 – 1.4% higher than the previous quarter and 15.9% higher than the same period in 2021
• There were 181 Local Market transactions during the fourth quarter of 2022 – 53 fewer than the previous quarter and 54 fewer than during the same quarter of 2021
• The raw median price of the 28 Open Market transactions in the fourth quarter of 2022 was £1.755m.

Guernsey has not been completely immune from the tougher lending rates and economic uncertainty facing the UK – and the full impact will not become clear until the residential property bulletin for the first quarter of 2023 is released later this year. However the picture remains broadly positive.

A large proportion of Savills buyers across Guernsey use cash or equity to fund their move, so this could go some way to insulating against wider financial pressures.

In recent months, supply levels have also improved and buyers can now choose from a wider range of properties as potential sellers take advantage of strong price growth and put their properties on the market.

In the UK we expect prime values in central London and the south of England to drop by 2% and 5% respectively by the end of the year. But the chronic supply/demand imbalance of well-presented homes in Guernsey’s most sought-after locations may well cushion the island’s property markets from similar price falls, having gone up by around 40% and 15% in Guernsey’s Local and Open markets respectively since the beginning of the pandemic. 

The fact that long-term commitment to moving home remains strong, with a significant increase in the number of buyers registering to buy a property in Guernsey with Savills in 2022 compared to before the pandemic, also provides cautious cause for optimism. There are plenty of people still wanting to relocate and larger, well-maintained properties are in strong demand, encouraging competitive bidding.

Looking further ahead, the island’s market will remain robust given the underlying demand and quality of life on offer, and we expect property to outperform the prime UK market over the next five years.