Hard negotiating, realistic pricing and high stock levels dominated the local market in 2014 but the experienced team at Swoffers can report a record year in local market sales. We started 2014 as a team of four, increased our numbers with a fifth negotiator and have had no choice but to recruit a sixth dedicated member of staff this year to answer demand. 2015 has started with the same gusto and we would predict a similar level of activity, plenty of new instructions and maybe even a further correcting of the market and a similar number of sales across all levels.
Early signs are good – as we write Swoffers already have 25 local market sales agreed awaiting contract and there are still 10 days of January remaining.
While the island witnessed a correcting in prices in 2014, what was a buyers’ market also became an opportunity for realistic vendors to approach their ongoing purchase with the same levels of negotiation. While many found that they may have greatly needed to reduce the price of their own property in order to sell, a similar discount on their new home meant they were able to get their dream house and still end up with the same net gain/spend as they had envisaged when they set out on their search.
Across the island the number of sales were down by about 16 per cent on 2013 – about 650 sales compared to 770 – and were indeed at their lowest level since the turn of the Millennium. The misleading headline figure for the average value of properties has been reported as increasing slightly in the last 12 months – in reality it was the higher number of £1m.+ sales in 2014 that artificially increased the average house price. Our experience of the market would suggest that properties over £1m.+ have fallen in the region of 10 to 15 per cent in the past 12 to 18 months, while further down the ladder property prices have at least dropped to the tune of a minimum of five per cent.
In 2014 there were 31 sales over £1m. – more akin to the figure of 35 sold in 2012 – and this was a large improvement on the 19 sales at this level in 2013. Swoffers were responsible for about 70 per cent of these £1m. + sales by value in 2014. Swoffers were also responsible for four out of five of the £2m. + sales in 2014.
This islandwide figure is even more encouraging when you bear in mind the very genuine Open Market options that are also available to local market residents looking in this price range. With such a close price correlation between markets, Open Market properties are a tempting proposition for many and there are many potential local market residents prepared to explore both markets.
Overall, there are definitely encouraging signs, however, perhaps most importantly a realisation from vendors that the Guernsey Local Market is not exempt from falling house prices. With this understanding, vendors have been forced to accept realistic values and market aggressively in order to make their properties stand out. Stock levels are high and at the time of writing Swoffers Local Market has access to circa 400 properties, nearly twice the levels of four or five years ago.
More positive news, there is clear evidence that banks are lending and for the first time purchasers have plenty of options and can take their time to view many houses and make an informed value for money decision. It is a time when experienced negotiators come to the fore and for this reason Swoffers remain confident of their continued success in a Local Market they dominated in 2014.
Swoffers continued to dominate the Open Market in 2014 and enjoyed their most successful year since 2007.
Swoffers were responsible for 75 per cent of sales by value including a number of confidential instructions, an approach which many of our Vendors have embraced – a no-nonsense way of selling homes with minimum fuss and total discretion.
The market had a fantastic start to 2014 with seven property sales totaling £24.5m. in January alone.
Homes that sold in 2014 ranged from modest terraced homes to luxury apartments and superb residences nestling in substantial grounds.
The number of properties coming to the market continued to increase throughout 2014 which has given potential purchasers a wide selection of homes to choose from. These buyers had a choice of quality, variety and price ranges and we feel this will continue during 2015. Les Residences, a luxury development on the West Coast, is due for completion in the spring of 2015 and has been launched exclusively via Swoffers. One St Julian’s Avenue, a Town development completed last year, has two remaining Open Market units for sale. These high end developments are situated at opposite sides of the island and both offer superb sea views and either an enviable sunset or a glorious sunrise.
The increase of new instructions last year had the opposite effect for vendors. Whereas a number of years ago there would have been less than 100 properties on the market at any given time, that number has swelled to more than 200. Vendors needed to make speedy decisions when receiving an offer in order to secure a successful sale and also show flexibility regarding price, something which we feel will continue in 2015. Sales were consistent throughout 2014, although there was undoubtedly increased momentum and activity in the second half of the year.
We have also had quality enquiries of potential buyers considering the move to Guernsey and we are confident that these will convert into sales in 2015. As a UK Election looms, we are anticipating an increased demand from those looking to relocate from the UK. We were also encouraged by the number of people returning to the island.
Overall, quarters one and two of 2014 were marginally down on those of the same period in 2013, although activity seemed to remain at the same level on the Open Market with the higher end being more active. In the same fashion as 2013, the final two quarters of 2014 saw an increase in both Local and Open Markets contracts, across all levels.
The continuing improvement of the UK economy has had a positive effect on the local rental market. There was quite clearly an increase of rental agreements completed for licence holders. This consequently led to more activity at the middle and upper end of the market, with family homes becoming much sought after.
2014 saw a general increase across the board of properties available to rent, none more so than apartments. This trend seems to have continued into early 2015 with over 50% of properties currently available from this sector.
Last year also saw a good number of new enquiries from overseas on the Open Market. What is also promising is to see the volume of leases extended in this market, proving that Guernsey is becoming a place one can call home for a good period of time, particularly from UK based families and individuals. Over 40 Open Market houses were let by Swoffers in 2014, proving similar levels to those of 2013. Yet again we have seen the lower to middle sectors proving busy, predominantly being rented to sharers.
In 2014 Swoffers Commercial achieved the largest office letting in Guernsey since 2008 by successfully negotiating the assignment of 26,000 sq.ft of prime office space at Trafalgar Court. The sector as a whole saw completed office transactions up 44% when compared to 2013. Activity in the market was not just restricted to the office sector however, the investment market was very active in 2014. We experienced increased demand for good quality investment property and the year saw demand outstripping supply in this sector.
This trend looks set to continue in 2015, already we have seen an increase in enquires across all sectors indicating an even brighter outlook for commercial property in the year ahead. This has been driven by positivity in the UK economy, with GDP returning to pre-crash levels and falling unemployment. The growth in the economy looks set to continue which in turn drives the demand for good quality office space. With no significant developments currently under construction and very little prime office space available the question is will we find ourselves in a position to meet the demand from tenants in 2015?