The average house price in Wales has fallen for the second consecutive time this year to £242,076, latest figures show. This was a quarterly decline of 1.2% and more than £3,000 since March, as pressure from interest rate hikes subdue the housing market.
This was also £7,000 down on the record high of just over £249,000 recorded in the final quarter of 2022 according to Principality Building Society’s Wales House Price Index for Q2 2023 (April-June), which reports the rise and fall in house prices in each of the 22 local authorities in Wales.
Compared to the same period last year, the annual price rise is now below 1% - the largest slowdown in annual house price growth for almost a decade. This subdued picture is reflected across Wales as local authorities continue to report more quarterly price falls than increases. Cardiff was the only local authority to record a new peak price of £310,930.
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The average price by property type in Wales for Q2 is reported to be £360,302 for detached homes, £219,460 for semi-detached homes, £171,546 for terraced homes and £154,508 for flats. There were fewer than 8,500 sales transactions in Wales in Q2, a modest 5% fall compared with the previous quarter, but down 24% on a year ago.
Compared with a year earlier, property prices in 9 of the 22 local authorities have still increased, with only Denbighshire, Gwynedd and Powys reporting annual falls of more than 5% (6.1%, 6.1% and 8.9%). The local authority of Monmouthshire reported both the largest quarterly and annual increases at 12.4% and 15.4% respectively, bringing the new average house price to £415,000.
Shaun Middleton, head of Distribution at Principality Building Society, said: “In Spring we saw a few signs that market sentiment was recovering, after being hit badly by the turmoil following the 海角视频 Government’s Autumn mini-Budget.
“However, activity in Q2 has been a little weaker than in Q1 and further weakness now seems likely. This picture is repeated across Wales, with the significant majority of local authorities reporting price falls in the latest quarter, as well as year-on-year.”
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He added: “Our last outlook offered up a modestly optimistic view of the future based on the market expectation that interest rates were nearing their peak. However, since then, to fight inflation, the Bank of England has continued to raise the base rate with a 0.25% rise in May and a 0.5% rise in June (so currently standing at 5%).
“Financial markets are now expecting further rises, continuing throughout 2023 and into 2024, perhaps peaking at 6.5%. Constant rate rises have led to mortgage product repricing, and inevitably this has been disruptive.
“Higher rates also impact the amount people can afford to borrow, as a result sellers have found it harder to attract buyers and some have been forced to offer discounts and lower their expectations in order to secure sales. While few are forecasting a full-scale housing market recession, it is quite clear that the market is becoming more difficult.”
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