The average house price in Wales reached a new record of £249,076 at the end of 2022, according to Principality Building Society’s latest Wales House Price Index.
This is despite quarterly price growth slowing to 1.3% in Q4, which dragged annual price growth back to 9.9%, just below the rate of inflation.
Across Wales in Q4, house prices reached new highs in 10 of the 22 local authorities, but for the first time in over two years, more local authorities reported quarterly price falls than increases.
Principality’s index also revealed that Welsh property sales were down by around 5% in Q4 compared with the same period in 2021. However, the society suggested these latest activity figures may be “flattered” by buyers moving quickly to complete purchases when favourable mortgage deals were available.
The society is therefore expecting prices to edge lower in 2023 in the face of higher interest rates, stagnant earnings, and cost of living pressures.
Head of distribution at Principality Building Society, Shaun Middleton, said: “Looking back at 2022, Wales has not suffered the more extreme price volatility seen in England. Typically, the housing market was more buoyant than expected partly because of the long-term issue of the shortage of the supply of homes, combined with pent-up demand.
“Matters have improved since the tumultuous mini-Budget last September, with lenders returning to the market which increased competition and modestly reduced mortgage rates. It does appear that the era of exceptionally low mortgage rates is over.
“Depending on trends in inflation and the actions of the Bank of England in terms of pushing up the base rate to counter that, we can expect mortgage rates to remain somewhat elevated for the foreseeable future.”
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