THE number of property sales has tumbled by more than a quarter in the first six months of this year. But Chief Minister Lyndon Trott yesterday rejected the suggestion that indicated the island was on the verge of a recession.
‘Guernsey’s economy has continued to perform strongly throughout 2008,’ said Deputy Trott.
‘It remains regrettable that inflationary pressures persist on the back of high fuel and food prices, but Guernsey’s primary industry is performing strongly. Unemployment remains very low but there is never any room for complacency.’
Deputy Trott pointed to the fact that deposits and funds under management had grown by more than £35bn. in the first quarter of this year as a sign that Guernsey’s economy was still healthy.
He added that income tax receipts through the ETI system had also risen sharply after taking inflation into account.
Treasury and Resources minister Charles Parkinson admitted that the latest house sales figures were a worry, but, like his colleague, said it did not mean Guernsey was heading towards a recession.
‘Housing trends are important because they are a reflection of consumer confidence,’ said Deputy Parkinson.
‘People moving house tend to buy furniture and other items so if the number of sales have gone down, the purchasing of household goods will decline.
‘Given the environment of slowing growth and rising inflation, we have to be concerned.’
ABConveyance statistics produced by Ray Sebire, of Unusualities of Guernsey, show that the number of local house sales in the first six months have fallen from 407 in 2007 to 316 this year.
Local market flat sales have reduced by 153 to 104, while open market sales have dropped from 58 to 31 during the same period.
Mr Sebire has been collecting and analysing the figures for more than 12 years.
He said the figures were the most worrying he had seen.
‘I was at the Greffe collecting this week’s figures and advocates’ clerks who were there said it had slowed considerably.
‘Pricewise there is not a lot of difference, but the number of bonds is well down and that means the sales are down, which means there are going to be fewer really big sales.’
However, Deputy Parkinson urged caution and not to read too much into comparing this year’s housing figures to those of 2007.
‘Last year was an exceptional year so comparisons with 2007 may be unflattering.
‘It might be more sensible to make comparisons to 2006 which was a good year, but not a Champagne year.’
He added that Guernsey was likely to follow the trend of any UK slowdown.
A recession is defined as two consecutive quarters of economic decline.
‘The Bank of England monitors this and will keep us informed of what is happening in the UK and the Guernsey economy is likely to follow that pattern fairly closely but with some differences.’
Article posted on 9th July, 2008 - 2.30pm
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