Guernsey housing market 'slowing faster than expected'

The average purchase price for Guernsey properties dropped by 3.8% in the last three months

A leading business lobby has said it is concerned by a recent drop in Guernsey residential property prices.

Richard Hemans, from the Guernsey branch of the Institute of Directors (IoD), said the market was "slowing faster and further than expected".

According to official figures, the average purchase price for Guernsey properties dropped by 3.8% in the last three months.

The slowdown follows an average price rise of more than 50% in five years.

There were 113 transactions in the first quarter of 2023, the latest data said.

Mr Hemans, IoD Guernsey's economic lead, said this was the lowest number of local market transactions in at least 25 years.

"Although it is difficult and risky to draw conclusions from one quarter in isolation, the latest quarterly figures are somewhat concerning because they indicate the local property market is slowing faster and further than expected," he said.

Richard Hemans, from the Institute of Directors, said the property market could be at a "turning point"

The Residential Property Prices Bulletin released in February showed the price in the last quarter of 2022 was 51.6% higher than it was five years before at £638,267.

However, the average purchase price for a local market property in the first quarter of 2023 was £613,942, nearly 4% lower than the previous quarter.

Mr Hemans said the figures may reflect the "aftershocks" of former UK Prime Minister Liz Truss's mini-budget, which rankled markets.

'Further declines'

He said affordability "remains stretched" and it is taking longer to sell a property, with sellers forced to accept "steepening discounts".

"These latest quarterly figures do suggest the market may be at a turning point - and the Q2 2023 data will be critical in understanding whether Q1 was just an anomaly, or the start of sustained weakness," he said.

"Most of the indicators in the bulletin predict a softer period for the Guernsey property market."

He said a shortage of housing, a strong economy, low number of forced sellers and small population growth were supporting the property market - but rising interest rates, inflation and higher taxation were challenges.

"We are likely to see further declines in transactions and price growth this year," he added.

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