For those of us who keep a sharp eye on the property market there’s been a definite sense of déjà vu over the last three months or so – with the trends witnessed in the early part of the year continuing into the summer.

That’s not wholly unsurprising. It’s been well documented the market hit a peak in 2022 – so a cooling off period was perhaps somewhat inevitable.

We’ve simply seen a return to more seasonal trends and something that resembles a post-pandemic norm - with the number of transactions in the three months to June this year broadly similar to that of 2019 and 2018.

Consequently, transactions have taken longer to complete because buyers haven’t necessarily felt the same level of urgency as experienced during the previous couple of years. This also means that realistic pricing has been key to driving activity; something that both sellers and buyers have had to keep in mind.

Local Market

According to the latest States of Guernsey property bulletin, the average purchase price for Local Market properties was £600,836 in the second quarter of this year – 2.1 per cent lower than the previous quarter but 0.3 per cent higher when compared to the same period last year and 46.2 per cent higher than five years previously.

There were 175 Local Market transactions during the three months to June this year – 62 more than the previous quarter but 61 fewer than this time last year and eight fewer than five years ago.

Rising interest rates and the increasing cost of living continue to make life challenging for those buying and selling.

The good news is there are still a robust number of active buyers in the Local Market who remain committed to a purchase – they are just having to adjust their budgets accordingly.

There will also likely be more stock coming to the market in the upcoming months, which is good news for those now starting their property search. We certainly have a strong pipeline. It’s just the market remains more price sensitive than when compared to the recent past.

Open Market

The Open Market has also had a slower start to the year, with the general economic climate making overseas buyers more cautious. However the States of Guernsey property bulletin does give some cause for optimism.

The number of transactions is on par with 2022 – with 20 transactions in the three months to June compared to 19 for the same period last year. The average median price has also increased by 19.5 per cent year on year, albeit this is traditionally subject to greater variation given the smaller number of transactions.

The long term forecasts remain positive and we expect activity to increase as we approach the end of the year and early 2024. Guernsey remains a very attractive destination, particularly when compared to the unsettled nature of the UK and the possibility of a General Election on the horizon.

Rental market

According to the latest States of Guernsey property bulletin, the average monthly rental price for Local Market properties was £1,864 in the second quarter of 2023 – 4.8 per cent higher than the previous quarter, 2.6 per cent higher than the second quarter of 2022 and 42.3 per cent higher than five years previously.

This was somewhat of a surprise as rental prices had – to some extent – looked to have been stabilising at the end of last year. Clearly that’s not been the case in recent months, but this possibly has more to do with the types of properties being let, rather than prices increasing in general. 

It’s true that some landlords have had to increase their monthly asking price - higher rates of TRP, rising insurance quotes and the general expense of routine maintenance work for example, have all put upward pressure on prices.

Stock levels also remain a challenge; the number of rental properties available simply does not satisfy demand. Rising interest rates are deterring many new landlords from entering the buy to let market and, similarly, it is proving more difficult for first time buyers to get onto the property ladder – resulting in them staying in rented accommodation for extended periods before they commit to a purchase.

Consequently, there is a particular shortage of one and two-bedroom apartments and smaller family homes. In comparison, we have seen more three to four-bedroom homes available, and they naturally command a higher price.

There continues to be a large proportion of people relocating to Guernsey for work, so competition for rental properties is only set to increase.