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The average house price in Wales fell to £234,086 at the end 2023 following continued economic and financial pressures, according to latest quarterly figures from the Principality Building Society.

Its Wales house price index for Q4 of 2023 marked the fourth consecutive quarterly fall. House prices in Wales are now down 6% - or £15,000 - when compared to Q4 of 2022 when a price of £249,076 was recorded. Despite it being the largest year-on-year decline since the financial crisis, house prices remain 25% higher than five years ago.

While two local authorities - Cardiff and Caerphilly - report record high prices at £308,648 and £207,904 at the end of 2023, the main trend for Q4 was a subdued market with year-on-year price falls recorded in 18 of the 22 local authorities.

Six local authorities – Monmouthshire, Carmarthenshire, Blaenau Gwent, Torfaen, Denbighshire and Merthyr Tydfil all experienced double digit price falls when compared to the same period the previous year, with Merthyr Tydfil reporting the largest fall of 21.2%.

Shaun Middleton, head of distribution at Principality Building Society, said: “The housing market in Wales has been through a difficult period and given the continued squeeze on the cost of living alongside the higher cost of mortgages- as households came off much lower fixed rates - it is little wonder that some have forecast continuing price falls in 2024, followed by a recovery in 2025.

“However, there are some positive signs including lower inflation and an expectation that the Bank of England rate has now peaked at 5.25% and will fall during 2024. Indeed, financial markets are pricing in several rate cuts, bringing the BoE rate down to 4% later in the year. Mortgage markets have already moved, with lenders cutting rates quite significantly as competition intensifies, and we might expect that to continue.”

There were around 9,700 transactions in Wales at the end of 2023, just a slight drop on the previous quarter but down by a fifth on a year ago. Although all property types have experienced weaker sales, detached properties - down 27% - continue to trail significantly behind other property types. As in many other parts of the º£½ÇÊÓƵ, the pressures facing the housing market has had an impact on demand and activity levels. For Wales, quarterly sales transactions have declined year-on-year through the whole of 2022 and 2023.

When looking at price movements by property type, the different property types are currently down between 1% and 7% when compared to year-earlier levels, with flats having fallen the most from peak price in relative terms – down nearly 9% from June 2022.