Local market sees 8% rise despite quietest third quarter on record

Figures from the States quarterly residential property bulletin showed that prices during the months of July, August and September hit an average of £647,889 – 7.8% higher than the previous quarter and 3% higher than same period in 2022. This is also 54.3% higher than five years ago.

However, the number of actual transactions fell significantly to only 138 – 96 fewer than the same time last year.

In terms of the number of transactions, it was the quietest third quarter since the bulletin was first published in 1999.

Mawson Collins residential sales manager Esther Jones said she had initially been surprised by the increase in price, due to recent interest rate rises affecting the market.

‘However, when you look back at the actual sales, you can see there was a skew to higher-value sales, with fewer transactions at the £250,000-300,000 end,’ she said.

‘The number of transactions are also so much lower, which will affect the figures.’

Savills residential sales director Nick Paluch agreed that a larger proportion of transactions had been at the higher end of the market.

‘The number of three and four-bedroom homes sold in the last three months to September for example, was the highest it’s been all year,’ he said.

‘In general, the market is much more price-sensitive than it has been and sellers have had to align their asking price with buyers’ lower budgets.’

However, the report showed that sellers had only accepted offers close to the asking price, with the difference between the maximum advertised price and the final sale price narrowing for the first time in 12 months. The final sale price was, on average, 5.9% lower than the maximum advertised price during this quarter, compared with a gap of 6.9% the previous quarter.

The number of open market sales also fell, with only 12 transactions in the third quarter of 2023 – almost half the number of sales in the same period as last year.

Average open market prices fell to £1.44m., compared with £1.57m. in the third quarter of 2022, but with only a slight fall of about £30,000 in the average price over the last four quarters to £1,652,734.

Mr Paluch believed the market conditions were still encouraging for next year.

‘There are definite signs that confidence is starting to return, particularly as interest rates appear to have stabilised in the short term, certainly in the last month or so – which these figures don’t account for – we’ve experienced an increase in activity,’ he said.

‘Demand will likely remain strong in the local market, while in the open market – particularly at the higher end – Guernsey still represents good value for money when compared to elsewhere. We may also see more interest from those living in the UK, especially with the prospect of a general election on the horizon.’

Mrs Jones said that market conditions would depend on changes to mortgage rates.

‘It all comes down to affordability. People are waiting to see if mortgage rates will fall or stabilise, which would bring confidence back to the market,’ she said.

‘I do not think we will see reductions in house prices, but we will just see a slow, more stable rise or a flattening.’