Around 68 per cent of respondents to the RP Data survey believe now is a good time to buy property.
While high, this number is significantly lower than the 80 per cent recorded a year ago.
Moreover, the proportion of people who believe the market is vulnerable to a correction has climbed from 60 to 66 per cent.
RP Data research analyst Tim Lawless said these results indicate ongoing worries about a “property bubble”.
“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,” he said.
Mr Lawless said the high acceleration in values was putting a dampener on market sentiment.
While half of respondents believe values will continue to rise in the next six months, their expectations for growth are fairly moderate.
“Clearly, Australians remain positive about the direction of dwelling values. However, most respondents who think values will rise over the coming six and 12 months have fairly measured expectations of value growth, with most suggesting values are likely to rise by less than five per cent over the coming year,” Mr Lawless said.
He said these reservations were particularly evident in markets like Sydney and Melbourne, where capital gains have been highest.
In Sydney, only 49 per cent of respondents believe now is a good time to buy a home, compared to 73 per cent in Brisbane and 74 per cent in Perth.
Tasmania showed the highest level of enthusiasm among buyers, with 90 per cent believing now is the time to get into the market.
On the flip side, 79 per cent of Sydneysiders think sellers are in a strong position, compared to 40 per cent of Tasmanians.