House prices take a tumble

While the number of transactions rose in the last quarter, the average price fell for the second time in a row. The quarterly property prices bulletin reported that the average price paid for a local market home from April to June was £600,836, which was 2.1% lower than the first three months of the year. That quarter had seen a fall of 3.8% – the first significant reduction for five years.

But prices are still some 46% higher than they were in 2018.

‘The housing market hit a peak in 2022, so a cooling-off period was perhaps somewhat inevitable,’ said Nick Paluch, director with the residential sales team at Savills Guernsey. There were 175 local market transactions during the period – 62 more than in the first quarter of the year.

Mr Paluch said the slowdown in local market activity was not wholly unexpected.

‘The market has returned to more seasonal trends and something that resembles a post-pandemic norm – with the number of transactions now broadly reflective of 2019 and 2018.’

Sales were taking longer to complete due to buyers not necessarily feeling the same level or urgency as they had done in the last couple of years.

‘Realistic pricing has therefore been key to maintaining momentum – something that both sellers and buyers have had to keep firmly in mind.’

While rising interest rates and the cost-of-living continued to make life challenging for people selling and buying, there was still a ‘robust number’ committed to buying in the local market, but they were having to adjust their budgets.

He said that agents expected more stock to come onto the market in the upcoming months, which should encourage people who were just starting to look for properties.

The figures reflected what Swoffers was seeing, said director Andre Austin.

‘This slight fall does not come as a surprise,’ he said.

‘The increased cost of borrowing, general cost-of-living issues and shortage of stock have all contributed to the current situation.

‘Our lengthy experience tells us that the property market sees these kinds of cycles, and doesn’t indicate any significant cause for concern.’

In the open market, there were 20 transactions in the second quarter and the average price of these was £1,633,125

Mr Paluch said this was on a par with last year. The average median price had increased by 19.5% but this was traditionally subject to greater variation given fewer transactions.

‘Long term forecasts remain positive and we expect activity to increase as we approach the end of the year and early 2024,’ he said.

The island was still a very attractive destination, ‘particularly when compared to the unsettled nature of the UK and the possibility of a general election on the horizon.’

Swoffers managing director Craig Whitman added: ‘Guernsey continues to be an attractive relocation destination and our open market team continues to be busy.’