However, prices were still 2.4% lower than a year earlier, according to the latest index from Principality Building Society.

After peaking at just over £249,000 in late 2022, prices dropped back by 8% or a total of £20,000 in the period up to the start of this year.

After adjusting for inflation, this represented a 14% fall in real terms.

Most local authorities saw quarterly price increases in the three months to June, for the first time since 2022.

However, on an annual basis there was still some steep drops – the biggest of which was in Merthyr Tydfil where prices were down by more than 20% compared to last year from £184,083 to £146,322.

Bridgend and Ceredigion saw the strongest growth on both a quarterly and annual basis, as prices in both rose by more than 16% compared to Q1 to reach £250,921 and £281,382 respectively.

Principality head of distribution Shaun Middleton says the quarterly increase in Welsh house prices “marks a significant turnaround and suggests that the market may be stabilising”. 

He says: “The last few years have marked the most challenging housing market conditions since the Global Financial Crisis in 2008, with first-time buyers encountering the toughest conditions in about 70 years, according to the Building Societies Association.

“Looking ahead, the new UK Labour Government are moving forward with a significant legislative move aimed at accelerating the development of infrastructure and the construction of 1.5 million homes in England.

“Meanwhile the Welsh Government has committed to deliver 20,000 new low-carbon homes for rent within the social sector during the current term.

“Together with our insight, this suggests that the second quarter may well represent a new dawn for the housing market in Wales, as we expect house prices to increase, with a higher volume of transactions, supported by better economic conditions, increased affordability and growing buyer interest.”