The property market in Guernsey has seen a surge in activity since lockdown restrictions on the island were eased, resulting in an increase in both transactions and average house prices compared to last year.
According to the States of Guernsey’s Q3 Quarterly Residential Property Prices bulletin, there were 277 Local Market transactions during the third quarter of 2020, 136 more than the previous quarter and 28 more than the same quarter of 2019. This is the highest number of transactions recorded in a quarter since 2006. The mix adjusted average purchase price for Local Market properties was £465,664 in the third quarter of 2020, 1.3% higher than the previous quarter, and 9.2% higher than the third quarter of 2019. The annual increase of 9.2% was the highest since this measure was first calculated, in 2008.
The differential between the last recorded price advertised by estate agents and the transaction price was between 4.2% and 7% in Q3 2020 for all value bands, which is the lowest differential in more than five years.
Pictured: Nick Paluch, Associate Director, Guernsey Residential, Savills.
Nick Paluch of Savills Guernsey said: “There has been an element of pent-up demand but the uptick in activity is also down to the experience of lockdown; time spent at home has led many to reassess their housing requirements, with more space, both inside and out, and home offices at the top of the list for buyers. The levels of supply haven’t kept up with this huge increase demand and when a new property does come to the market, it tends to generate a lot more activity. It is important to note, however, that buyers are mindful of the on-going long-term financial impact of Covid 19, so the correct pricing of new instructions remains key.”
The Open Market has also seen an increased level of activity and is on course to have its best year since 2007, despite the travel restrictions in place requiring visitors to the island to quarantine for two weeks on arrival. The year to date total number of Open Market sales at the end of September was 53 compared to 48 at the same point last year. The median price (realty only) of the 20 Open Market transactions in the third quarter of 2020 was £1,222,250, compared with £1,520,719 in the third quarter of 2019, when there were 16 transactions.
“This is representative of the activity that we have seen post-lockdown, which has been primarily focussed at the lower end of the Open Market. We have seen a rise in cross-market buyers, that is locally-qualified applicants looking across to the Open Market, driven by the lack of stock in the Local Market. Many recent Open Market transactions below £1.5m have been to local buyers and this has the beneficial effect of freeing up Local Market properties to those looking to upsize. We have seen a handful of buyers who have viewed property virtually, though many of course still want to see houses in person, which is restricting the upper end of the HNW market.
“If the increase in activity in the Open Market continues in the remaining months of 2020, then we could see the total number of sales recorded moving back to the pre-2008 Global Financial Crisis levels.”