As Guernsey prepares to welcome hundreds of athletes from around the world for the XIX International Island Games later this summer, its perhaps apt that the housing market of the last six months or so could be described as being a little slow out the starting blocks.

Certainly when compared to the heights of previous years, activity has been somewhat subdued.

The rise in the cost of living and increased mortgage rates has led to buyers reducing their budgets, while vendors who haven’t needed to sell immediately have decided to sit tight. Consequently we’ve seen a return to a more needs based market – people buying and selling due to a change in circumstance such as a new job or for family reasons rather than being driven by a purely lifestyle decision.

Prices do still remain higher than a year ago, but we’re now starting to see things settle as the market moves back into what you might describe as a more normal rhythm following a period of unprecedented activity.

The latest States of Guernsey property bulletin bears that out, with 113 transactions on the Local Market in the first three months of this year – 68 fewer than the previous quarter and 86 fewer than when compared to the same time last year.

The average Local Market purchase price meanwhile dropped 3.8 per cent to £613,942 in the first three months of this year – but still 7.1 per cent higher when compared to this time last year and 50.7 per cent higher when compared to five years ago.

The Open Market meanwhile saw just 14 transactions in the first three months of this year – compared to 26 by the end of the first quarter in 2022. However the average price has increased to £1.778m – 3.1 per cent higher than the previous quarter, seven per cent higher year on year and 36.8 per cent higher than five years previously.

Rental prices increase 

The latest States of Guernsey property bulletin shows the average rental price for Local Market properties increased to £1,778 per calendar month in the first three months of this year – a rise of 3.1 per cent compared to the end of 2022, seven per cent higher year on year and 36.8 per cent higher than five years ago.

The increases are broadly reflective of the market. There remains a lot of people coming from overseas to work and we’ve seen consistent demand – particularly for smaller family homes and one and two bedroom properties for individuals and couples. It’s the larger homes that are taking a bit longer to let.

Interestingly what we’ve seen on the Local Market is that many landlords are choosing to work with their existing tenants to keep any potential rental increases at an affordable level rather than go for the higher market rate. Where agreements are up for renewal and a tenant has been in place for some time many landlords are choosing to look at the bigger picture.

They value the long term and trusted relationship they have with the tenant and rather than go through the process of remarketing and have their property sit empty while they wait for someone new – where they could possibly achieve a higher price – they look at what’s reasonable and come to a compromise.

Long term outlook

While there might not quite be the same level of urgency in the market as there was 12 to 24 months ago, we do expect things to start picking up as we head into summer. A little bit of sunshine always brings more positivity.

Demand remains robust and house price forecasts are broadly positive. The underlying reasons that make Guernsey such a great place to live will not disappear.

The lifestyle on offer in the island is a significant draw for those looking on the Open Market – and there continues to be a core number of committed buyers who are willing to make a move regardless of conditions on the Local Market.

We still expect Guernsey to outperform the UK over the next five years – so if you’re searching for a home for the long term then it’s a good time to be looking. To finish where we started – it’s a marathon not a sprint.