For the first time in a decade, the average house price in Wales has experienced a decline, with the cost of a typical home decreasing to £239,378 in the third quarter of 2023.
According to the Wales House Price Index from Principality Building Society for Q3 2023, this marks the maiden annual drop in prices since 2013.
The data, encompassing price fluctuations across all 22 local authorities in Wales, has shown three successive quarterly falls this year.
By the close of Q3, house prices had suffered a 1.1% quarterly decline and an annual reduction of 2.6%.
Consequently, the current average house price is roughly £10,000 less than its previous peak of just above £249,000 in Q4 2022.
The housing market landscape in Wales has been quite challenging, with most regions observing a downturn in prices during the recent quarter.
However, a silver lining can be noted in the quarterly price surges in the Vale of Glamorgan (16.8%) and Conwy (5.9%). These areas have set new records, with Q3 average house prices reaching £344,384 and £243,328 respectively.
Shaun Middleton, head of distribution at Principality Building Society, commented on the trend, citing economic pressures and heightened interest rates as contributing factors. “These conditions have impacted affordability for a large number of buyers, leading to a subdued housing market,” Middleton said.
Compared to the vibrant market of previous years, the present situation seems more lacklustre.
Across Wales, a major portion of local authorities, 18 out of 22 to be precise, have reported annual price reductions.
Denbighshire saw the steepest decline of 15.9%, trailed by Pembrokeshire at 11.6%, and Powys at 10.5%.
Transaction-wise, there were just below 10,000 in Wales during Q3, marking an uptick from the previous two quarters. However, it’s still a 20% drop year-on-year.
Middleton added: “The Bank of England’s decision to keep the base rate steady at 5.25% in September has resulted in some improved mortgage deals.
“Nonetheless, the wider economic challenges, including higher interest rates, suggest that transaction levels might remain subdued for a while.”
Analysing price trends by property type reveals that various property categories are now 1-4% below their figures from the previous year.
“Even though all property categories have felt the slowdown, semi-detached homes have displayed some resilience, witnessing a less than 1% annual decrease and remaining only 3% beneath their March 2023 peak, as per the report from Principality.
