House prices in Wales rose by 1.3% in the year to Q1 2024 and by 1.2% in Q1 alone, according to Nationwide.
Despite this, Savills’ current forecasts suggest prices will fall by 2.0% in Wales in 2024, however Savills suggests this is likely to be an underestimate.
But affordability does remain constrained, and a full market recovery in the short term is conditional on interest rates falling as financial markets expect.
House prices in Wales are predicted to outperform the UK average over the next five years at 21.4%, the highest growth expected of any area of the UK.
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As a falling base rate brings down mortgage rates, affordability will improve, says Savills.
The research also suggests that affordability in Wales is less stretched than elsewhere, suggesting a market recovery can begin earlier.
Transaction activity has been below average for some time, with the shortfall increasing in recent months — the three months to January 2024 saw the fewest transactions in a three-month period since early 2015 (excluding mid-2020).
While transactions may remain low in the coming months because of delays in reaching completion, sales agreed have begun to increase, again pointing to a more positive market than in 2023.
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