Property market report: Wales

Wales has not escaped the downturn: prices have fallen only slightly less than the average, down 6per cent since October compared with 10 per cent in the rest of the UK. The headlines for Wales hide the fact that South Wales has been far harder hit, with prices down between 10per cent and 12per cent in locations such as Merthyr Tydfil and Swansea, whereas prices in the north have risen marginally year on year: they are up 2per cent each in Denbighshire and Wrexham.

Liam Bailey, head of research, Knight Frank

The market has become quieter, with fewer new buyers. Any sellers with questionable motives have decided not to come in; many have battened down the hatches for the next 18 months. Good-quality property, well-priced, is still selling but buyers are being more considered and have become very perceptive, putting in offers if a property has been on the market for some time. But the second-homes market is still buoyant, whether it is in the Brecon Beacons, Carmarthenshire or Pembrokeshire.

If your property is on the coast or has a sea view, it is selling, but if it is inland, or if it needs work done, prices have dropped by 10 per cent. There had been talk that owners of second homes would sell up but we have not found that. In fact we had a two-bedroom property in Cwm Pennant that has just gone under offer that we could have sold six times over, such was the demand.

Sales are now being agreed at 5 to 10 per cent below asking prices, but the size of the discount depends on the sellers' circumstances. There is more activity below £250,000, but the upper end of the market, from £500,000 to £1million, is very slow because people in that price range are waiting to see what will happen. At every price level, and in every location, properties need to have an edge - we are not seeing any hot spots that are immune, because the issue at present is mortgage finance.

The slowdown did not really bite until spring and I would say that prices are 10 or 12 per cent lower now. Sales have been extremely quiet: there have been sales but only because some people have adjusted more quickly and learnt to play the market. Investors are looking for people who want to offload at very keen prices - estate agents must try to guess what investors will pay, because that is who is buying. In the past fortnight or three weeks there has been an increase in inquiries and offers - people are testing the market. The lettings market has been very, very strong, and has kept a number of estate agents alive. It was also been been a lifesaver for owners in Cardiff Bay and similar areas, which have been a nightmare to sell. Some of the prices have dropped 40 per cent, or even more at auction - one flat, which sold last year for £260,000, recently went for £125,500. It will be six to eight months before the market bottoms out, then there will be a plateau and it will take another five years before prices recover.

Property market report: Wales

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