House prices in Pembrokeshire have dropped by 4.2% quarterly and 5.2% annually down to an average price of £246,329.

House prices in Pembrokeshire, Carmarthenshire and Ceredigion have all fallen when compared with the same period the previous year.

The figures have been released from Principality Building Society’s Wales House Price Index for Q4 2023 (October-December), which demonstrates the rise and fall in house prices in each of the 22 local authorities in Wales.

Principality’s report shows that Carmarthenshire is one of six local authorities in Wales to record a double-digit price fall when compared to the same period the previous year, down 10.7% annually and 4.7% quarterly to an average house price of £208,642.

House prices in Pembrokeshire have fallen by 5.2% annually and 4.2% quarterly down to an average price of £246,329, while Ceredigion is the only county in West Wales to have recorded an increase at the end of 2023, up 4.3% quarterly to an average price of £277,100.

However, year-on-year the average house price is still down 3.1% when compared to the last quarter of 2022.

Across Wales, the average price of a home has fallen to £234,086 at the end 2023.

This is down 2.2% on the quarter and 6% - or £15,000 - when compared to the same period the previous year when the peak price of £249,076 was recorded.

Despite this being the largest year-on-year decline of Wales’ average house price since the aftermath of the Global Financial Crisis in 2009, house prices remain 25% higher than five years ago.

Shaun Middleton, Head of Distribution at Principality Building Society, said: “The housing market in Wales has been through a difficult period and given the continued squeeze on the cost of living alongside the higher cost of mortgages - as households came off much lower fixed rates - it is little wonder that some have forecast continuing price falls in 2024, followed by a recovery in 2025.

“However, there are some positive signs including lower inflation and an expectation that the Bank of England rate has now peaked at 5.25% and will fall during 2024. Indeed, financial markets are pricing in several rate cuts, bringing the BoE rate down to 4% later in the year.

“Mortgage markets have already moved, with lenders cutting rates quite significantly as competition intensifies, and we might expect that to continue.”

There were around 9,700 transactions in Wales at the end of 2023, just a slight drop on the previous quarter but down by a fifth on a year ago.

Although all property types have experienced weaker sales, detached properties - down 27% - continue to trail significantly behind other property types.

As in many other parts of the UK, the pressures facing the housing market has had an impact on demand and activity levels.

For Wales, quarterly sales transactions have declined year-on-year through the whole of 2022 and 2023.

Shaun continued: “Consumer confidence is becoming less negative, and the same is true of surveyor respondents to the latest RICS Wales housing market survey.

“More instructions are coming into the market and there is a sense that activity will increase, and on the back of that, prices might stabilise.

“Some analysts for the overall UK market are now suggesting that while the first quarter might still see prices in negative territory, there will be a steady improvement across the year.

“Without doubt, there will be challenges ahead, but the outlook for 2024 is more of an improving view than it was. Potentially, UK Government Budget measures (due March 6) might seek to stimulate market activity which would add further momentum, and of course housing will loom large in the manifestos being readied for the approaching General Election when it is called. In summary, it is an improving picture for 2024.”

For more information go to: www.principality.co.uk/mortgages/house-price-index.