‘Cost of living and interest rates hit local market sales‘

There were 576 local market property transactions in 2023, which was the lowest seen since 2015.

By comparison, 2022 saw 850 and there were 984 in 2021.

The latest property prices bulletin published by the States showed that the average local market property price was £609,362 in the last quarter of the year, a fall of almost 6% compared to Q3.

‘The rise in interest rates and increase in the cost of living led to varying degrees of turbulence in the housing market throughout the course of last year,’ said Savills Guernsey head of residential sales Stuart Leslie.

‘Consequently a lot of people were sitting tight and waiting for the situation to improve before committing to a move, which is why we saw a drop in the number of overall transactions year on year.’

While the number of properties sold increased by 12 over the previous quarter, that was 31 fewer than the fourth quarter of 2022 and 86 fewer than the same period in 2018.

But Mr Leslie said there was good reason to be optimistic for the spring, since inflation was now moving back towards the Bank of England’s 2% target and there was more stability in the mortgage market.

‘The market is still likely to be price sensitive, but best-in-class, well-maintained homes are attracting plenty of interest,’ he said.

Swoffers’ Scott Ingrouille said the figures were no surprise and a spike in interest rates and a period of economic uncertainty was always going to make it a challenging time for the property market.

‘However, the Guernsey property market has always been incredibly resilient and it’s important to remember property markets are cyclical,’ he said.

In the open market, the average price of the seven transactions in the fourth quarter was £1.462m. 12 months previously it was £1.755m.

Mr Leslie said his firm too was starting to see more activity in that sector.

‘Falling lending and leveraging costs should translate into a wider range of buyers with less pressure on budgets, and we could well see enhanced interest from re-locators in the coming months with a general election on the horizon in the UK.’

Alex Stuart from Swoffers said that last year was challenging.

The volume of sales being well-down on 2022 was always likely following the ‘unprecedented Covid years’.

With seven open market sales going through in the last quarter, most of which were lower-value, average prices fell as a result.

‘That’s why it’s important not to view quarterly figures in isolation,’ he said.

‘It’s been a steady start to 2024 with a number of overseas buyers over on second and third visits, together with activity from within the island. We are expecting momentum to increase as we head closer towards the UK election.’