High property prices here have always been linked to the strength of the economy and the 20% annual increase in median residential sales reported this week by the Policy Council was generally regarded as a good sign.

The downside, however, is that – on the strength of that single snapshot – an average home is now within a whisker of £400,000 and a starter property close to £300,000.

These are huge sums and drive up the cost of rents, property maintenance and building and construction. What other investment with the solidity of bricks and mortar can generate capital growth of around 5% in just 12 weeks?

What the Policy Council doesn’t tell islanders, however, is that higher prices exclude more people from owning their own property and that the ‘affordability index’ of median annual house price divided by an approximation of annual average earnings is worsening.

According to the Nationwide, the UK index at the end of last year was 4.4, suggesting a house can be bought for less than five times annual income.

Based on the States own median figures, Guernsey’s index is 14.6 and even based on the higher average earnings of civil servants, it is still 11.6 – staggeringly high and an indication of how out of reach property is for many islanders.

Sustainable Guernsey, a report which is an indication of how well – or otherwise – government policies are serving the island, records that the index was 10.3 in 2008, itself a massive 8.4% worsening of the position compared to the previous year.

And although the confidence of individuals and their mortgage providers to buy property is a clear indicator of the strength of the economy, prices are really driven by supply and demand.

The island has a target of building 300 new homes a year and the figures suggest that either that figure is not being achieved or else it is too few.

Alternatively, the main driver might be the growth in population, which is not controlled by the housing laws.

Under the population management proposals currently out for consultation, that could all change unless the States decides to let more people in each year.