House prices remain 'relatively unaffordable'

The Institute of Directors Guernsey said property prices in the island remain "relatively unaffordable", despite new figures showing a slight decrease.

New figures from the States showed rents and house prices fell at the end of 2024, with the average rent dropping to £2,037 a month.

The statistics show renters are still paying 50% more than five years ago, while the average house price remains over £604,000.

Richard Hemans, the institute's lead on economics, said: "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 said market property prices declined by 2.6% in 2024 after increasing by 1.2% in 2023.

"They are now 40% higher than 2019," he said, adding: "The market does seem to be stabilising."

The economics lead said rental costs increased by 7% in 2024 and rental prices were a "major driver of inflation".

"The cost of renting a property in Guernsey has increased by 50% since the pandemic as the population has grown and not enough properties have been built," he added.

Mr Hemans said 72 new property units were created in 2024 and 529 over last five years which he said was "significantly lower" than the 300 units per annum target.

"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," he said.

"This imbalance is likely to drive prices higher in 2025."

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