The average price of a home in Wales fell 2.6% to £239,378 in the third quarter from 12 months ago — the first time in a decade that prices have dropped year-on-year.
The nation’s first annual house price decline since 2013, follows three consecutive quarterly falls this year, according to Principality Building Society’s third quarter Wales House Price Index.
House prices fell 1.1% in the third quarter, and average home prices are now almost £10,000 down from their peak of just over £249,000 in the final quarter of last year.
The housing market “remains challenging across Wales” with property prices declining in 18 of the country’s 22 local authorities, says the report.
Denbighshire posted the largest annual fall of 15.9%, followed by Pembrokeshire with a drop of 11.6% and Powys, down 10.5%.
Principality Building Society head of distribution Shaun Middleton says: “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 study points out that there were around 10,000 transactions across the nation in the third quarter, an increase on the previous two quarters of the year, but down 20% on a year ago.
The report says: “The slower nature of activity primarily reflects the much higher interest rates over the past year and is being experienced in much of the rest of the UK as well.”
Middleton adds: “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 transaction levels may continue to disappoint for some time.”
