2024 to see a "return to the norm"

Thursday 18 January 2024

Guernsey's property market is expected to see a return to some form of normality this year, after a period of high activity followed by higher interest rates and tighter lending, according to the property team at Collas Crill.

Partner Paul Nettleship and Associate Harry Round compiled a review of the 2023 property market and a preview of this year's potential activity.

"To quote Mark Twain, there are 'lies, damned lies and statistics' – perhaps a trite aphorism, but one that holds true," wrote Mr Nettleship, Partner and head of Collas Crill's Guernsey Real Estate team.

"In our review of 2022, I predicted a 'back to normal' 2023 following a very busy 2022 (and a heated post-pandemic market in 2020/2021).

"Therefore whilst one could look at the low number of sales and lending in isolation, it was inevitable that the market would correct itself following an unsustainable market surge in previous years.

"However, the rise in interest rates heralded an end to cheap money, and this was undoubtedly the largest factor in the market's downturn.

"The prediction for 2024? A slow building back of the market, which will be strongly influenced by interest rates and, for the open market, the upcoming UK general election may well play a role."

The Collas Crill property review stated that following the "exceptional activity in (Guernsey's) property market over recent years (as has been the case across the globe). Against a climate of higher interest rates and tighter lending, 2023 represented a consolidation and 'return to the norm' for activity."

2023 saw over half a billion pounds of property conveyed, with some £550m worth of property changing hands in the year (the 7th highest total value since 2000). That was some £300m lower than 2022, but with the caveat that 2020-2022 were "very much stand out years".

Whilst values remained high, the number of transactions declined.

There was a total of 659 arms' length transactions completed, with the Local and Open Markets accounting for 607 and 52 of these transactions, respectively.

In the Local Market, the median average house price stood at £634,695 for the year, down 4.94% on the 2022 median average.

On the Open Market, the median average house price stood at £2,434,083 for the year, an increase of 62.3% on the 2022 median average.

A total of £392,361,498 was lent against Guernsey property in 2023 - almost £200m lower than 2022, which was down on 2021.

Lloyds Bank International remained the island's most active lender, with a total of £109,558,531 being lent across 284 transactions. The Island's top-three lenders were high-street banks, Lloyds, HSBC and RBSI (NatWest International) which accounted for over 60% of activity.

Investec Bank was the fourth most active lender and the most active of the private banks in local secured lending. 

Pictured top: Paul Nettleship.