The average house price in Wales has fallen for the third time this year to £239,378, the first time in a decade prices have dropped year-on-year. This is the first year-on-year drop in Wales since 2013 and comes following three consecutive quarterly falls this year.
According to the latest Wales House Price Index from the Principality Building Society, the new average house price is now almost £10,000 down from its peak of just over £249,000 recorded at the end of 2022.
Housing market conditions continue to be challenging across Wales, with most local authorities reporting price falls in the latest quarter. Of the 22 local authorities in Wales, 18 reported a fall in annual house prices with Denbighshire experiencing the largest annual fall of 15.9%, followed by Pembrokeshire with a drop of 11.6% and Powys, down 10.5%.
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However, the Vale of Glamorgan (16.8%) and Conwy (5.9%) both recorded record high average house prices in Q3 2023, at £344,384 and £243,328 respectively. There were just below 10,000 sale transactions in Wales in Q3, an increase on the previous two quarters of the year, but down 20% on a year ago as a result of high interest rates.
Shaun Middleton, head of distribution at Principality Building Society, said: “The downward trend in house prices has continued into the third quarter. Economic pressures over recent months, paired with higher interest rates than we’ve become used to, means that affordability remains a problem for many buyers. This has put pressure on the housing market, which remains subdued, when compared to recent years when record average prices across Wales were seen.
“The picture across Wales shows us that more local authorities have been reporting price decreases rather than increases, translating into year-on-year falling house prices. This is a clear indication of the broad-based nature of the market’s retreat over recent months.”
Mr Middleton added: “The Bank of England’s decision to leave base rate unchanged at 5.25% in September, on the back of easing inflationary pressures, has prompted better mortgage deals in recent weeks, although affordability in Wales remains stretched and the overall benefit for consumer confidence may be limited by a growing awareness that interest rates look set to remain higher for longer. This suggests that transactions levels may continue to disappoint for some time.”