Confidence in the Australian housing market has dropped, according to the latest RP Data research.
The RP Data- Nine Rewards housing market sentiment survey has revealed 74 per cent of Australians think now is a good time to purchase a property, down from 80 per cent in May of this year and 76 per cent in October last year.
RP Data’s research director Tim Lawless said the drop in sentiment has largely been driven by those markets where dwelling values have shown a substantial level of growth in recent times, such as Sydney and Melbourne.
Just over half the respondents to the survey expected dwelling values to rise over the next six months compared with just 33 per cent a year ago.
Of those surveyed, 57 per cent expect house values to rise over the next 12 months compared to just 42 per cent a year ago.
“Clearly Australians remain positive about the direction of dwelling values, however most respondents who think values will rise over the coming six and twelve months have fairly measured expectations of value growth with most suggesting values are likely to rise by less than 5% over the coming year,” Mr Lawless said.
The survey also indicated 60 per cent of respondents think the housing market is vulnerable to a significant correction, highlighting concerns amongst consumers around sustainability in house values.
“While most respondents think values will continue to rise, it is interesting to note that most respondents are also concerned about the sustainability of dwelling values.
“The ongoing debate about a housing market bubble is clearly an issue that has the potential to dampen housing market sentiment, particularly in markets such as ACT, Perth and Sydney where home values tend to be higher and more than 65% of respondents think the housing market is vulnerable to a significant correction,” said Mr Lawless.