Property prices scale new heights

Monday 15 February 2021

The average Local Market property now costs half a million pounds, following an "unrelenting" rise in prices that "demonstrates the stability of the market", but also exacerbates concerns over Guernsey's affordable housing crisis.

The average purchase price was £493,174 in the fourth quarter of 2020 - 5.9% higher than the previous quarter and 11.8% higher than the fourth quarter of 2019.

It amounts to the largest annual rise in average property prices since 2008, while Open Market activity has also boomed to pre-financial crisis levels. 

According to the latest conveyancing statistics compiled by Unusualities of Guernsey, the total transactions in the Local and Open Markets were the highest for those markets since 2006 and 2007 respectively.

It all comes despite a three-month lockdown last Spring, as the island's property market roared back into life and the pandemic put an increased emphasis on the desire for more living space. 

Pictured: The Island Development Plan, which came into effect in 2016, stipulated that every development over 20 homes must include units of affordable housing. It is yet to result in a single 'affordable' property being built since. 

“Even with reduced activity during lockdown, the 2020 total number of property purchases bonds increased by 8% in comparison to 2019,” Skipton International's Business Development Manager, Roger Hughes, commented.

“Lockdown caused many people to reassess their requirements from a home – looking for more outdoor areas and office space, a trend which I think we will see continue for some time. This activity not only demonstrates the stability of the local property market but more generally the local economy.

“While we are still very much in the midst of the pandemic, there are signs of things returning to normality."

A short-term boom is, however, a cause for longer-term concern. Annual price increases of no more than 1-2% above RPI can be tolerated to keep property at an affordable level, according to Mr Hughes. 

Pictured: Mr Hughes said the upward trend in property prices could be unsustainable if it continues. 

Of the 97 Open Market transactions completed last year, the median price (realty only) was a staggering £1,397,750 - a quarter of a million increase on the £1,142,700 recorded in 2019.

The 11 Open Market flats sold in 2020 had a median price of £780,000.

In quarter four alone, there were 43 Open Market transactions, which is four more than was recorded for the whole of 2016.

Jason Morgan, Head of Carey Olsen's Property Group in Guernsey, said activity in the property market had been "unrelenting".

Pictured: The Guernsey Housing Association aims to get people onto the property ladder through its partial ownership property. It recently opened its 1,000th build. 

"The property market has made an extraordinary recovery following Guernsey's coronavirus lockdown in the early part of last year when there was a predictable hiatus in activity," said Mr Morgan. 

"What is equally encouraging is the increased level of interest in the Open Market."

Pictured top: 345 Local Market transactions took place in the last quarter of 2020, 68 more than the prior quarter and 154 more than this time the previous year.