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Average flat price soars to £300k

Average flat price soars to £300k

Monday 12 July 2021

Average flat price soars to £300k

Monday 12 July 2021

The average local market house now costs more than half a million pounds and the average flat almost £300,000.

Sales activity rebounded in the second quarter of this year following the slow start to 2021 as a result of the island's second lockdown. The latest conveyancing statistics have been compiled by Unusualities of Guernsey.

Figures reveal that there were 306 Local Market transactions between April and June, made up 236 houses and 70 flats – nearing quarterly highs of Q3 and Q4 last year when 318 and 362 sales took place respectively. 

It means for the six months to the end of June, there have been 480 Local Market transactions, with the median price (realty only) for the 376 houses sold so far this year currently standing at £536,250, up from £498,625 for the same period last year.

The median price of the 104 Local Market flats sold in the first six months of 2021 is £294,938, up by almost 20% from the £248,625 recorded last year. 

"We continue to see properties selling above their full asking price"

"There remains plenty of demand for both the Local and Open Markets, and we continue to see properties selling for, or even above, their full asking price," said Jason Morgan, who heads up Carey Olsen's Property Department.

In terms of activity, it was a similar story for the Open Market.

In total, there have now been 57 Open Market transactions so far in 2021, with a median price of £1,361,250, which is down from the £1,742,813 for the same period last year. The seven Open Market flats sold so far in 2021 have an average price of £1,534,535.

"It will be particularly interesting to monitor the level of interest we are seeing there, after what was already a record-breaking 2020," said Mr Morgan.

"Guernsey, notwithstanding the pandemic and perhaps in some ways because of it, has never been a more attractive place to live or relocate to."

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Posted by Nicholas Mahy on
The property market culture in Guernsey is one where rising property values are widely seen as good for the community. However, while rising property values are particularly good news for estate agents and property speculators, as exhibited in the tone of this article, for the community as a whole, these inflated values are a disaster for Guernsey's exploding housing crisis. Nearly impossible monthly rents are also the main cause of rising recruitment difficulties and costs in the hospitality and care sectors.
In these times of such low returns on bank deposits, investment in domestic property for rent is a bonanza, even when taking into account ridiculously high rental market management fees. A significant number of non-resident landlords are attracted into this market, exacerbating the problem.
Surely a primary responsibility of any government must be to guarantee the welfare of its citizens by providing or enabling proper shelter (housing). But the words heard from politicians are all about building more houses - where? and on what time scale? The main benefits from any new housing developments, big or small, will be received by builders and property developers, and the outcomes will only serve to force even higher property values, and therefore an even worse housing situation.
Bold solutions are needed. Perhaps the problem could be substantially solved by phasing in high levels of "stamp duty" and/or "short-term capital gains tax" on properties sold/purchased by corporations (registered anywhere, including Guernsey), by non-resident persons, or as second homes. By "high levels" I mean levels that discourage speculation completely in some circumstances - not 5% or 10% of transaction value, but 30% or 60% - real disincentives, for the benefit of the community. A 40% or 60% direct tax on domestic rental income might also serve. Did I hear that the States of Guernsey need to raise significantly more cash in the forthcoming years ?
I recognise that my suggestion will not be welcomed by people with power in Guernsey, least of all by property market professional, owners of high value property, and their friends in the States.
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