The Welsh housing market has experienced yet another decline. According to the latest data from the Principality Building Society, house prices in Wales have fallen for the fifth consecutive quarter. As of March 2024, the average house price stands at £229,263, marking a significant 6.5% decrease from the previous year.
The downturn in housing prices is widespread across Wales, affecting 18 out of the 22 local authorities. The Vale of Glamorgan, in particular, has faced the most severe drop, with house prices plunging by 15.7%. Other regions such as Carmarthenshire, Denbighshire, Merthyr Tydfil, and Powys also reported double-digit declines.
Contrarily, some areas have bucked the trend with modest increases. Flintshire leads with a 12% rise, followed by gains in Gwynedd, Caerphilly, and Swansea. These isolated instances of growth suggest that market conditions can vary greatly within different parts of Wales.
Sales Volume Also Takes a Hit
Alongside falling prices, the number of house transactions has also decreased. The first quarter of 2024 saw just under 8,400 properties changing hands, a 15% drop compared to the same period last year. This decline in sales volume has been ongoing since late 2021, illustrating a consistent decrease in market activity.
Detached properties, often the most sought-after, have experienced the weakest sales performance. This indicates a shift in buyer preferences, possibly due to changes in affordability and economic pressures.
Economic Factors Influencing the Market
Shaun Middleton, head of distribution at Principality Building Society, said, “Economic pressures, coupled with the higher cost of mortgages has meant affordability continues to be a problem for many buyers, placing undoubtable pressure on the housing market in Wales. Despite what has marked the most challenging housing market conditions since the Global Financial Crisis in 2008, the latest news that inflation continues to fall – although slower than anticipated – suggests that the housing market in Wales could soon see more positive signs. Many economic analysts have also predicted that the Bank of England base rate has peaked at 5.25 and will fall this year. This assumption is prompting better mortgage deals and easing the affordability of housing.”