Savills Portugal

After a record-breaking 12 months many people may well be wondering what’s next for Guernsey’s housing markets.

Despite the challenges presented by the pandemic – including the most recent Omicron wave and subsequent tightening of restrictions – the island’s property forecasts look strong.

Lifestyle changes continue to motivate buyers and Guernsey – with its stunning coastline, lush countryside and strong sense of community – has become an even more desirable destination.

Buyers’ appetites across both the Open and Local Markets remain healthy and average property prices have risen as a result of pent-up demand. Indeed, the average Local Market sale price being achieved by our Guernsey office has risen by 71 per cent from £382,434 in 2019 to £655,111 last year, while for the Open Market it has increased by 182 per cent from £933,417 to £2,632,250 over the same period.

Transaction numbers on the Local Market in 2021 meanwhile were the highest they have been since 2008. Furthermore, Open Market transactions were the highest since records began in 2006, exceeding the previous peak by over 25 per cent.

There was also a noticeable shift in the super prime market, with the number of transactions over £5 million showing great promise for the future.

On the ground we witnessed a number of people relocating to the island because they see Guernsey as a safe place for their families and their wealth.

Many of these buyers are coming from the UK – particularly the south of England – but there has also been a large amount of ‘on island’ movement with upsizers and downsizers alike. Overseas interest has also been strong.

Outlook

So what does this mean for 2022? Very broadly we expect the current trends to continue. The Open Market in particular is likely to be very busy as we head towards the end of the UK tax year.

Interest rates also look set to remain relatively low and many mortgage providers have lending products to suit everyone – from first-time buyers and growing families through to retirement age borrowers and high net worth individuals, which should help keep everything moving.

One area to keep an eye on, however, is stock. Currently there is still not enough property on the market to meet demand.

Interestingly, many recent Open Market transactions below £1.5 million have been to locally qualified applicants who are driven by a lack of Local Market stock. This has freed up Local Market properties to those looking to upsize and it will be interesting to see how this trend develops as 2022 progresses.

It is also good to see the States of Guernsey giving special dispensation to change certain out-of-use hotels into residential properties and the Guernsey Housing Association looking to increase the number of properties they have – although this will take time to implement.

For the short term at least, it still remains a seller’s market and longer term changes to people’s working patterns and lifestyle choices are likely to underpin demand. Competition among buyers is fierce – but setting an ambitious yet realistic asking price from the start will be key to maintaining momentum.