Caerphilly County Borough has seen the second highest growth in house prices in Wales, according to analysis from the Principality.
According to the building society’s Welsh House Price Index, the average home in the county borough costs £144,126 – an increase of 7.3% over the last 12 months.
Only Pembrokeshire has seen higher growth in Wales with an increase of 8.1%.
Trevor Isaac, Managing Director of Caerphilly-based estate agents Brinsons, said the increase in average price was mainly down to the lack of housing in the area.
He said: “There is an imbalance of supply and demand.
“Estate agencies in Caerphilly at the minute have got fairly limited stock. It is the lowest stock we have had for some time.
“When you’ve got limited stock, you’ve got pent-up demand. Local authorities throughout Wales have to maintain a five-year supply of housing land for development but many, including Caerphilly, struggle with this target which in turn impacts on the supply of new housing coming to the market.”
Mr Isaac also said the increase in values have mainly been driven by Caerphilly town, and its surrounding areas, because of its proximity to Cardiff.
He added: “Cardiff has grown and Caerphilly is just over the mountain.”
The average house price in Wales has increased by £5,826, or 3.3%, over the last 12 months, to a new high of £179,855.
The Principality said home buyers continued to benefit from low rates of interest available on mortgages.
Tom Denman, Chief Financial Officer at Principality Building Society, said: “House prices in Wales continued to grow as the market bounced back from uncertainties around Brexit and the economy earlier in 2017. However, transaction levels are broadly flat if we compare the numbers sold in 2016.
“Growth was largely due to proportionally more transactions in higher demand areas such as Cardiff and Newport. New builds in areas such as Newport, have resulted in a price premium that has helped to push up average prices in those regions. A shortage in housing supply, high employment, and low interest rates, have all contributed to growth.
Similar economic conditions for 2018 indicate that house prices will continue to grow modestly in Wales.
“There has been slow a down in activity recently off the back of the Bank of England interest rate increase.
“However the removal of stamp duty charges for first time buyers of properties up to £300,000 since the November Budget could drive different first time buyer behaviour before the Land Transaction Tax comes into force in April.”