Prices fell by £338 from May to June and by £1,391 since the start of the year. Nine of the last 12 months have seen a fall in price although the rate of decrease was less in June than in May.
Richard Sexton, director of e.surv chartered surveyors, said: “Despite growing optimism regarding the market across the border the Welsh housing market is still caught in the grip of the credit crunch.
“The mortgage market is thawing in England and parts of Scotland but the multiplier effect hasn’t spread to Wales.”
But more positively the number of first-time buyers is improving slightly with reports of new buyer enquiries in Wales shooting up in June to a level that is double the three month average.
The largest monthly fall at -5.2% was in the Isle of Anglesey followed closely by Carmarthenshire which dropped by -5%. Flintshire saw a fall of -3% with the other decreases being around or below -2%.
The highest monthly rise was in Ceredigion at 3% with Caerphilly and Conwy at around 2%.
The index, in recent months, has highlighted a difference between the northern and southern housing markets in Wales.
This difference lessened in June as far as the annual price change is concerned. In the 14 southernmost authorities the average fall on annual basis was -1.3%.
This was not too far from the average fall of -1.1% in the six northernmost authorities. The two central authorities of Powys and Ceredigion showed annual falls averaging -0.9%.
Demand for properties has been affected by the Welsh economy’s exposure to public sector cuts and the creation of fewer jobs than in other areas of the UK.
Consequently June’s sales dropped by 12.6% compared to the same month last year.
Wales has a two-tier market with an unhealthy reliance on wealthier borrowers. These older buyers are in a stronger position to benefit from the record low mortgage rates as they have been able to bank on the equity from their homes to grab cheap deals. On the other side of the fence sit first-time buyers unable to raise a deposit to get on the ladder.
The Welsh government may soon be given more powers over its housing market as the Treasury consults on plans to devolve the responsibility for stamp duty to the Welsh Assembly.
Peter Williams, housing market specialist and Chairman of Acadametrics, said: “The Welsh government is currently looking at a range of options to support buyers who are struggling to secure finance. The aim is to stimulate demand as well as to encourage a greater supply of new build properties.
“A fundamental element of these options will be a shared equity scheme, which is to be managed by an external party, and will be launched later this year.
Sexton added: “Only time will tell but it’s more likely now to gain power over stamp duty which will result in a good range of new policy responses to help deal with the nation’s housing problems.”
He described the stamp duty tax as a hindrance for both home movers and first-time buyers and said the Welsh government needed to reduce the burden of taxation and make it easier for people to move home.
He added: “The plans to focus on supporting new buyers, with the launch of the shared equity scheme, and its aims to push demand and encourage a stronger supply of new build properties will be key in boosting home ownership levels.”
