The latest data released by Principality Building Society has revealed that, year-on-year, the average house price in Wales had dropped to £234,086 by the end of 2023 following continued economic and financial pressures.
The company’s Wales’ House Price Index, provided by Acadata and using Land Registry data, tracks the rise and fall in house prices in each of the 22 local authorities in Wales per quarter, and the latest data shows that house prices in Wales are now down 6% – or £15,000 – when compared to the same period of the previous year, when the peak price of £249,076 was recorded.
Despite the trend of falling prices during 2023 that saw the largest year-on-year decline of Wales’ average house price since the aftermath of the global financial crisis in 2009, house prices still remain 25% higher than five years ago. For more property stories sent to your inbox twice a week sign up to the property newsletter here
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When the data is broken down into the 22 counties, six local authorities have experienced a double digit decrease including Carmarthenshire, Blaenau Gwent, Torfaen, and Denbighshire. The county to see the most significant drop was Merthyr Tydfil, with the average price down by 21.2%.
Arguably the most surprising statistic from the perspective of falling prices is the 10.2% drop for Monmouthshire, consistently one of the most popular areas for house buying and continually topping the list of house price increases, but now possibly feeling the effects of being the most expensive county in Wales for many years. See more about that here.
This trend of slowing and decreasing house prices is in marked contrast to the period during the Covid-19 pandemic. During this time Wales was the area of the UK with the highest increase in average house price, month after month, and even recorded a more unusual ‘full-house’, when all of the 22 counties saw a rise in its average house price. Find out more about that here.
But there are four county areas of Wales that have recently bucked the overall downward trajectory to record an increase in their average house price. The Isle of Anglesey saw the highest rise in Wales of 8.4%, taking its average house price to £281,400, a slow trend that has been growing over the last two decades according to Rightmove that has now escalated the island to the top of Principality’s list, find out more about that here.
The north Wales county of Gwynedd has also recorded a noticeable 3.5% increase in its average house price, taking it to £251,406 whilst Cardiff and Caerphilly have both reported record high prices at £308,648 and £207,904 respectively at the end of 2023.
Percentage annual change in average house price by local authority 2023
Increase
Isle of Anglesey +8.4% £281,400
Gwynedd -+3.5% £251,406
Cardiff +1.7% £308,648
Caerphilly +0.6% £207,904
Decrease
Vale of Glamorgan -0.4% £333,887
Ceredigion -3.1% £277,100
Newport -4.6% £243,467
Neath Port Talbot -5.2% £171,683
Pembrokeshire -5.2% £246,329
Conwy -7.0% £224,772
Flintshire -7.1% £217,434
Wrexham -8.3% £210,088
Bridgend -8.6% £218,226
Rhondda Cynon Taf -9.5% £164,052
Swansea -9.5% £220,336
Powys -9.8% £252,589
Monmouthshire -10.2% £343,077
Carmarthenshire -10.7% £208,642
Blaenau Gwent – 12.5% £136,006
Torfaen -13.2% £187,960
Denbighshire -14.4% £203,205
Merthyr Tydfil -21.2% £140,956
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.”
As in many other parts of the UK, 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.
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 in terms of numbers of properties sold, detached properties were down by 27% and continue to trail significantly behind other property types. Regarding prices per property type, flats have experienced the most significant price drop, down nearly 9% from June 2022.
“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.” Shaun continues, “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.
“Consumer confidence is becoming less negative, and the same is true of surveyor respondents to the latest RICS Wales housing market survey. More instructions are coming into the market and there is a sense that activity will increase, and on the back of that, prices might stabilise.
“Some analysts for the overall UK market are now suggesting that while the first quarter of 2024 might still see prices in negative territory, there will be a steady improvement across the year. Without doubt, there will be challenges ahead, but the outlook for 2024 is more of an improving view than it was.”
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