The latest CoreLogic RP Data and TEG Rewards Housing Market Sentiment Survey has revealed two thirds of Australians now think the housing market is vulnerable to a significant slump in home values.
The proportion of those concerned about a large correction in the housing market was broad, with all regions indicating at least 61 per cent of respondents are concerned about a property sector crash.
The survey also showed a significant drop in the proportion of respondents who believe now is a good time to buy, with 61 per cent saying they would consider buying now, down from 71 per cent a year ago.
Perceptions about buying conditions have worsened across most regions in the past 12 months. However, this is most notable in Sydney, where buyers remain pessimistic.
By contrast, perceptions about buying conditions increased by 1 percentage point and 20 percentage points in Perth and the Northern Territory, respectively, compared to the previous year.
The survey found just 31 per cent of respondents expect dwelling values to rise over the next six months, compared with 49 per cent a year ago.
Sydney recorded the greatest deterioration in expectations, with 31 per cent of respondents located in the harbour city forecasting values to rise over the next six months, a drop from 66 per cent a year ago.
The survey comes after a recent report revealed house prices have dropped in almost every capital city, with Sydney prices dipping below the million-dollar median.
According to the Domain house price report for the March quarter, Melbourne and Hobart are the only capital cities where house prices are still rising.
The report showed that median house prices in Hobart surged during the quarter, rising by 4.3 per cent to $360,212, while Melbourne's median house price rose by 1.2 per cent to $726,962.
Every other capital city saw a decline, including Darwin where the median dropped sharply by 4.9 per cent to $610,305.
Sydney’s house prices fell, recording a quarter-on-quarter drop of 1.5 per cent, bringing the median down under the $1 million mark to $995,804.
This was followed by Canberra where house prices fell by 1.4 per cent after five consecutive quarters of growth.
In Perth, house prices dropped by 1.3 per cent to $579,914 over the quarter, while Adelaide recorded a 0.5 per cent drop to a median figure of $491,422, and prices in Brisbane fell by 0.05 per cent to $512,809.
“Weakening economic activity and growing uncertainty is impacting fragile consumer and investment sentiment, leading to falling house and unit prices in most capital cities,” Domain chief economist Andrew Wilson said.
“The outlook for house prices remains subdued, with capital city growth likely to continue to track at best just above the inflation rate for the remainder of 2016.”