The average house price in Wales has hit a record high of £245,893, 12.4% higher than the previous year as prices continue to rise in the third quarter of 2022.
According to the Principality Building Society's latest Wales House Price Index, prices rose by 2.2% from July to September 2022.
Transactions also remained relatively strong in Q3, helped in part by buyers wishing to complete their house purchase while attractive mortgages were available. This could potentially change in the last quarter of the year as the housing market responds to current economic challenges.
Read more: The story of Wales’ own oil company and plans to go green
The index recorded increases in property prices in all 22 local authority areas across Wales compared with a year earlier. Blaenau Gwent, Ceredigion, Flintshire, Rhondda Cynon Taf and the Vale of Glamorgan all reported annual price increases of more than 15% - above the current rate of inflation at 9.9%.
However, Gwynedd, Anglesey, Conwy in North Wales and the urban centres of Newport, Wrexham and Cardiff recorded more moderate price increases and will be experiencing modest drops in real terms, set against overall price inflation.
Overall the index report that these looked like the calmest market conditions since Q3 last year. There were only three instances where quarterly price changes were more than 5% in either direction - the Vale of Glamorgan and Flintshire reported gains of 5-6% while Gwynedd eased back by a similar percentage from its peak in the previous quarter.
In terms of transactions in Wales in Q3, the index calculated there were as many as 12,400, 13% higher than in Q2 and 1% lower than a year ago (but on par with corresponding pre-Covid levels in Q3 2019).
Most Read
Average figures showed sales of detached homes increased 11% annually, while semi-detached and terraced properties increased 13-14% annually. In contrast, flat sales report just a 1% increase year-on-year.
Sign up to the BusinessLive Wales newsletter and follow us on LinkedIn
As well as an in-depth early morning newsletter, we will be sending out regular breaking news email alerts. To sign up to this service
And, follow us on to catch the latest stories and to network with the Welsh business community.
Head of distribution at Principality Shaun Middleton said: "It is slightly strange talking about house prices in Wales reaching new peaks when so much has happened at the end of the third quarter with the 海角视频 government mini-budget and continued cost of living pressures. Transaction levels remained relatively strong over the third quarter, helped in part by buyers wishing to complete their house purchase with the attractive mortgage deals they had previously secured.
"With interest rates surging higher, meaning repayments on mortgages will become much more costly per month, the market faces significant challenges in the immediate future. Even though the Welsh Government has increased the Land Transaction Tax threshold from £180,000 to £225,000 in a bid to support first time buyers and those wishing to move homes, affordability will come under considerable pressure, which could mean that purchasing demand will reduce."
He added: "It must be remembered that higher energy costs and general rises in cost of living are increasing overall household expenditure which will have to be factored into mortgage lenders calculations when assessing borrowers’ ability to repay. This will reduce the amount lenders are able to loan to the borrower, make it even harder for first time buyers to obtain a mortgage and will also mean many people will be unable to obtain the bigger mortgage they need to move to their next home. For this reason, many are predicting a decline in house price inflation. However, there are many unknowns at this stage.
"A lot does depend on any potential government interventions, as well as, of course, on the actions of the Bank of England with regards to future rate rises. By the time of the fourth quarter report, there will hopefully be more clarity on what the outlook is for property prices."
Read more:
The Swansea cleaning entrepreneur who now runs a multi-million pound business
- RWE and Marine Power Systems partner for Celtic Sea offshore wind opportunities
Housebuilders agree to remediate buildings with fire safety issues in Wales
- The click-and-collect economy worth more than £1bn in Wales
Welsh retail sees much-needed boost as footfall returns to high street