- Written by Catherine Evans
- BBC News
Image source, Tim Ireland | PA wire
Despite the significant year-on-year decline, prices are still much higher than they were five years ago
House prices in Wales have seen their biggest fall since 2009 in the wake of the financial collapse, according to new figures.
The average house price at the end of 2023 was £234,000, down 6% from the record high the previous year, the Emirate Building Society said.
Merthyr Tydfil saw the biggest decline with prices falling by more than 20%.
Gwynedd, Anglesey, Cardiff and Caerphilly were the only areas where prices rose.
This is the fourth consecutive quarter in which prices have fallen in Wales.
The figures have been released from the Principality Building Society’s Wales House Price Index for October-December 2023, which shows the rise and fall in house prices in each of Wales’ 22 local authorities.
House prices in Wales have now fallen by 6% – or £15,000 – compared to the same period the previous year when the peak price of £249,076 was recorded.
This is the largest year-on-year decline in average house prices in Wales since 2009, which was in the wake of the 2008 global financial crisis.
Despite this, housing prices remain 25% higher than they were five years ago.
While two local authorities – Cardiff and Caerphilly – reported record prices of £308,648 and £207,904 at the end of 2023, the figures revealed a “soft market” with prices falling year-on-year in 18 out of 22 local authorities.
Six local authorities – Monmouthshire, Carmarthenshire, Blaenau Gwent, Torfaen, Denbighshire and Merthyr Tydfil – saw double-digit price falls compared to the same period the previous year, with Merthyr Tydfil recording the largest fall of 21.2%.
Sean Middleton, Head of Distribution at Principality Building Society, said: “The housing market in Wales has gone through a difficult period.
“Given the continuing pressure on the cost of living combined with the rising cost of mortgages, with households emerging from much lower fixed interest rates, it is not surprising that some are forecasting a continued decline in rates in 2024, followed by a recovery in 2025.”
He added that there were “some positive signs”, such as lower inflation and an expectation that the Bank of England’s interest rate would now peak at 5.25% and decline during 2024.
“Indeed, financial markets are pricing in several interest rate cuts, resulting in the Bank of England interest rate falling to 4% later in the year,” he said.
“Mortgage markets have already moved, with lenders cutting interest rates significantly as competition intensifies, and we may expect this to continue.”