Despite sale prices dropping – and rental price increases slowing – the IoD has warned that the biggest problem in Guernsey’s housing market remains the lack of new homes being built.
Reflecting on the latest data – relating to Q3 2025 – the IoD’s Lead on Economics said it’s clear that the housing market is “gradually rebalancing”.
But Richard Hemans warns without new properties entering the market, the same challenges will remain.
The latest property prices bulletin was published earlier this week – showing that the cost of renting a home in Guernsey continues to climb while average purchase prices for homes fell by a fraction.
The average price of a rental in the third quarter of the year was £2,112 – up 1.8% on the previous quarter and 2.8% higher than the same period last year.
Meanwhile average house prices fell to £592,584, based on the transaction data for the period. This was 0.7% lower than the summer months, and 2.8% lower than last autumn.
Sales were up with 209 Local Market and 22 Open Market sales completed between July and September.
Mr Hemans said this is all proof of further stability in the housing market – despite the fact that houses are selling for, on average, 7.3% lower than what was first advertised, and homes are taking longer to change hands with the average time between going on the market and a court date stretching to 265 days.
“Liquidity has improved sharply,” he said, adding, “this demonstrates that the post-COVID slump in housing activity has ended”.
“…the combination of moderating price falls and rising transactions suggests that confidence has returned to the market,” he said.
The open market remains very strong, added Mr Hemans, but he shares wider, broadly accepted concerns around the rental market.
Over the past five years rents have risen by 53.5% – increasing 1.8% between July and September this year, to hit an average of £2,112 per month.
But Mr Hemans highlighted that the four-quarter rolling average shows rent price increases are slowing.
“The four-quarter rolling average shows rents up 5.5%, down from 6.8% in the previous quarter,” he said. “The slowdown is therefore gradual rather than dramatic. Nonetheless, this easing in rental inflation will contribute to the wider moderation in Guernsey’s overall inflation rate.”
Acknowledge that renters pay a “painful” 55% of their earnings on putting a roof over their heads, “leaving many households under significant financial pressure”, Mr Hemans said first time buyers are also still stretched with home ownership outside of reach for many people.
He said there is an obvious reason why.
“Housing supply remains critically constrained,” he said. “Only 15 net new units were added in the quarter and 85 over the past year, less than one-third of the annual target of 310. Without faster progress on planning reform, land availability and delivery of new affordable and key-worker homes, supply shortages will continue to underpin both prices and rents, restricting the island’s ability to attract and retain workers and acting as a brake on productivity and growth.
“Overall, Q3 2025 confirms that Guernsey’s housing market is gradually rebalancing. Prices are stabilising, liquidity is improving and rental inflation is easing, all of which suggest a more orderly environment. Yet the fundamental challenge of insufficient housing supply remains unresolved and continues to underpin affordability pressures. The next phase must focus on accelerating the delivery of new homes if this renewed market stability is to be sustained.”