The average price of a property bought in Guernsey in recent months was £604,139 – while renters are paying an average of £2,037 per month.
The IoD says this suggests the retail side of the housing market has stabilised but there remain serious concerns over the “unaffordable” rental market and the impact that is having.
Richard Hemans, IoD Guernsey’s lead on economics said: “The newly formed States Housing Committee has an urgent, critical role to play in resolving this key challenge for the island.”
The latest data on house prices and rental costs, relating to the last quarter of 2024, was published this week.
The average purchase price of a Local Market property between October and December last year was £604,139 – down 0.9% than the previous quarter and 0.9% lower than the fourth quarter of 2023.
However, the four quarter average was 37% higher than five years previously.
On the Open Market, prices rose during 2024 but this is due to the smaller number of transactions and the wide ranging types of the properties changing hands.
The (raw) median Open Market price calculated using realty only purchase prices, was £1,755,000 in the fourth quarter of 2024 – up 10.5% on the year before, and up 51.0% on five years earlier.
The same situation is reflected in the rental market – with prices much higher than five years ago, despite small decreases recently.
The average cost to rent a home in Guernsey is currently £2,037 per month.
That is down 0.8% compared to last summer, but it is 6% higher than two years ago and a whopping 50.2% higher than five years ago.
Mr Hemans said that is an area of concern that the island’s new political committee will have to address following the June election.
“The local market stabilised in 2024 after a difficult 2023, whilst the open market expanded,” he acknowledged, adding that: “The cost of renting and owning a property remains relatively unaffordable in the island, which is caused by the mismatch between limited supply and strong demand.”
Mr Hemans believes the rate of increase in rental prices is “levelling off” but he says it is still a problem, partly due to the lack of new properties being built.
“Only 72 new property units were created in 2024 and 529 over the last five years, which is significantly lower than the target of 300 units per annum, or 1,500 over five years,” he said.
“This explains why Guernsey house prices will continue to remain high and strong in the context of full employment, robust earnings, falling interest rates and a growing population driven by positive net migration.
“This imbalance is likely to drive prices higher in 2025, act as a drag on productivity, keep inflation at elevated levels and make life harder for islanders.”
The full Quarterly Residential Property Prices Bulletin can be read HERE.