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The average house price in Wales has fallen to £242,076 in the second quarter of 2023, according to data collated by the Principality Building Society.

This is a drop of 1.2% since the last quarter (Jan – Mar 2023) from £245,101. This is the second consecutive quarterly fall. The average house price in Wales between October and December 2022 was £249,000.

Compared to the same period the previous year, house prices have still risen – but by less than 1%. The Principality said this was the largest slowdown in annual house price growth for almost a decade.

Across Wales in 2023’s second quarter, more local authorities are reporting quarterly price falls than increases.

Principality’s House Price Index shows that only Cardiff, out 22 local authorities, reported a record new peak price of £310,930.

In Caerphilly County Borough Council, house prices are down by 1.5% against the previous quarter and down 1.8% compared to the same time last year. The average house price is now £194,784.

There were also fewer than 8,500 transactions in Wales in the second quarter of 2023, a modest 5% fall compared with the previous quarter, but down 24% on a year ago. This comes as interest rates continue to rise along with the increased cost of mortgages.

Shaun Middleton, Head of Distribution at Principality Building Society, said: “In spring we saw a few signs that market sentiment was recovering, after being hit badly by the turmoil following the UK Government’s autumn mini-Budget.

“However, activity in Q2 has been a little weaker than in Q1 and further weakness now seems likely. This picture is repeated across Wales, with the significant majority of local authorities reporting price falls in the latest quarter, as well as year-on-year.”

He added: “Our last outlook offered up a modestly optimistic view of the future based on the market expectation that interest rates were nearing their peak. However, since then, to fight inflation, the Bank of England has continued to raise the base rate with a 0.25% rise in May and a 0.5% rise in June (so currently standing at 5%).

“Financial markets are now expecting further rises, continuing throughout 2023 and into 2024, perhaps peaking at 6.5%. Constant rate rises have led to mortgage product repricing, and inevitably this has been disruptive. Higher rates also impact the amount people can afford to borrow, as a result sellers have found it harder to attract buyers and some have been forced to offer discounts and lower their expectations in order to secure sales. While few are forecasting a full-scale housing market recession, it is quite clear that the market is becoming more difficult.”

The average price by property type in Wales over the past three months is reported to be £360,302 for detached homes, £219,460 for semi-detached homes, £171,546 for terraced homes and £154,508 for flats.