Richard Sexton, director of e.surv chartered surveyors, comments:
“House prices are growing marginally at the moment.
"The growth is being driven by increased demand from professional landlords and wealthier buyers, who are being tempted into the market by a seductive cocktail of low interest rates, and, in cyclical terms, relatively subdued house prices, particularly in traditional areas of BTL such as the Cardiff and Swansea student quarters.
"These buyers are helping support prices and prevent transactions from plummeting.
“The annual decline gives a better indication of the true health of the market, where the fall reflects the difficulties first time buyers are having in getting mortgages. The first time buyer is the horse that pulls the cart. For every first time buyer, three more buyers move house, further up the ladder.
“Without these buyers, the best the Welsh market can hope for is to stagger on. The difficulty in securing a mortgage with a small deposit means the housing market is becoming increasingly dominated by older buyers who already own a home.
"They have enough equity within their property to secure another mortgage, whereas first time buyers are trying to scratch together savings or begging for a loan from the bank of mum and dad.
"We can see that trend reflected in an 8% rise in the number of semi-detached properties sold, compared to a 3% fall in the sale of flats - the typical first time buyer property.
“If the Eurozone crisis worsens, the first time buyer market will seize up over the winter and become glacially slow. Lenders will be forced to raise rates and store up more capital, which will reduce demand, and push down prices.
"Arguably the Welsh housing market in 2012 will be influenced more by policy decisions in Westminster than by local effects. Unlike its counterpart, the Scottish Government, the Welsh Assembly has relatively few levers with which to support the market.”
