House prices in Wales have seen their biggest decline since the 2009 financial crash, according to new figures.
The Principality Building Society said the average house price at the end of 2023 was £234,000 – down by 6% from a record high the year before.
Merthyr Tydfil saw the biggest drop with prices down by more than 20%.
Gwynedd, Anglesey, Cardiff and Caerphilly were the only areas where prices increased.
This is the fourth consecutive quarter that prices have fallen in Wales.
The figures have been released from Principality Building Society’s Wales House Price Index for October to December 2023, which demonstrates the rise and fall in house prices in each of the 22 local authorities in Wales.
House prices in Wales are now down 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.
While two local authorities – Cardiff and Caerphilly – reported record high prices at £308,648 and £207,904 at the end of 2023, the figures revealed a “subdued market” with year-on-year price falls recorded in 18 of the 22 local authorities.
Six local authorities – Monmouthshire, Carmarthenshire, Blaenau Gwent, Torfaen, Denbighshire and Merthyr Tydfil – all experienced double digit price falls when compared to the same period the previous year, with Merthyr Tydfil reporting the largest fall of 21.2%.
Shaun Middleton, head of distribution at Principality Building Society, said: “The housing market in Wales has been through a difficult period.
“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.”
He added there were “some positive signs”, such as 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 Bank of England rate down to 4% later in the year,” he said.
“Mortgage markets have already moved, with lenders cutting rates quite significantly as competition intensifies, and we might expect that to continue.”
