The average house price in Wales came to £233,200 in Q4 of last year, a rise of 0.3% compared to the prior quarter but down 0.4% year-on-year.
According to Principality Building Society’s Wales House Price Index, this compares to a peak of £249,000 in late 2022.
The mutual said the year-on-year decline in house prices in Wales was an “overall course correct” and that this fall was “less significant than those seen previously, signalling a new positive direction of travel”.
Principality Building Society said transactions rose 18% in Q4 compared to Q3 to 12,800 transactions, which is the highest level for three years and “signals a strong consumer appetite, and a housing market in Wales that is poised to turn a corner”.
It is also a 28% rise year-on-year in transactions.
The report found that around 10 local authorities reported an average annual increase in house prices, with the largest rises occurring in Carmarthenshire at 9.2%, Blaenau Gwent at 8.5% and Wrexham at 5.6%
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The local authorities with the largest decreases were Gwynedd at negative 12.4%, Pembrokeshire at minus 8.9% and the Vale of Glamorgan at negative 8.3%.
On a quarterly basis, Merthyr Tydfil’s house prices decreased by 17.9% at one end, while Carmarthenshire’s climbed 8%.
Iain Mansfield, chief financial officer at Principality Building Society, said the Welsh housing market had shown “resilience against a challenging environment” throughout 2024 and that there were “clear signs of renewed confidence”.
He continued: “The steady growth in transactions highlights strong demand for housing underpinned by the ongoing challenge of limited supply, which continues to shape the market landscape.
“A more stable housing market is welcome news for buyers and speaks to the strong demand for housing, driven by buyers looking to enter or move within the market, despite the challenging landscape of the last few years.”
Mansfield noted that the recovering transaction figures show that “despite continued cost-of-living pressures, and the elevated rate environment, demand continues to grow”.
“Low supply of housing is a real challenge for buyers and there is also more that can be done to support buyers when it comes to the matter of affordability – especially for those hoping to get onto the housing ladder for the first time. Principality conducted a recent survey [that] revealed that 75% of our member respondents say that house prices in the UK are ‘too high’, and a further 74% of respondents agreeing it is ‘much harder’ for young people to get on the housing ladder,” he said.
Mansfield noted that, looking forward, the UK government had committed to extensive planning reforms in order to restore local housing targets – with a particular focus on increasing social and affordable housing, and this along with additional help for first-time buyers in Wales in the Welsh Government Budget was a “positive future outlook”.
“There is undoubtedly more to be done to ease affordability, and as a leading funder that works with the majority of housing associations in Wales, Principality has a vested interest in being part of the solution,” he said.
