As the season shifts, we’re starting to see the property market in Guernsey recover, marking a busy period for buying and selling houses.
However, the recovery will be gradual, with current statistics reflecting ongoing challenges such as the cost of living and higher mortgage rates that predominantly impacted the start of the year.
Home Sales
The first three months of 2024 saw 93 local market home sales, a significant decrease from both the last quarter and the same timeframe in 2023. The average sale price locally has also dipped slightly since last quarter and since the same quarter last year, but it remains significantly higher compared to five years ago. The open market average price dropped when compared to the previous year’s quarter.
Low sales figures early on in the year are attributed to caution from buyers due to fluctuating interest rates during the end of 2023, which affected properties that were in the process of being sold. It’s also put in context with the high volume of sales from 2020 and 2021, as property markets are known to be cyclical.
However, the market is showing signs of life again with the stabilization of mortgages offering some relief and encouraging buyers, as imminent steep rate hikes are unlikely at this point.
Stabilizing Market
With summer approaching, both the local and open markets are displaying increased activity.
Buyers are starting to commit more, with budgets creeping up and registrations exceeding expectations. The high-end market is also becoming more dynamic, spurred on by steadier mortgage costs and a slightly brighter economic forecast.
The markets remain price-sensitive, yet stabilized interest rates are making moving house a more attractive option for many.
This brighter outlook led Savills to revise its five-year UK housing market growth predictions upward, now expecting an average growth of 2.5% in 2024 and a total of 21.6% by the end of 2028.
Rising Buyer Confidence
Guernsey’s market may be distinct, but growing confidence in the UK could spell increased activity here as well.
Homes that are well-maintained and considered ‘best in class’ are still attracting the most interest, yet there’s healthy interest across the board. The UK’s upcoming general election could also prompt some potential buyers to consider relocation.
We’ve learned that predictability is not guaranteed, but as the Guernsey housing market often hinges on mortgage lending, the expected easing of interest rates might encourage market growth.
Rental Market
The rental market is mirroring the housing sales market, with a resurgence as summer approaches, despite a slight dip during the March/April period, possibly due to the Easter holiday.
Demand stays strong due to an ongoing shortfall in available rentals, though the rent prices have remained steady since the year’s start.
The current average monthly rental rate for local properties shows a small decline since the last quarter but is substantially higher than both the previous year and five years prior.
A variety of available rental properties indicates a healthy market outlook. Additionally, lower interest rates might motivate renters to buy their first home, potentially opening up more rental opportunities.
