The QBE Barometer report, which is based on a survey of current mortgage holders and those intending to buy residential property in the next five years, revealed there has been a significant drop in perceptions that the next year is the best time to buy.
The report said speculation about interest rate rises and the impact of the federal Budget had changed perceptions about the best time to buy.
Only 36 per cent of mortgagors and intenders think the next 12 months is the best time to buy property, compared to 42 per cent in last year’s survey. The proportion of respondents looking to buy in the next five years has increased, from 35 per cent in 2013 to 39 per cent, indicating “people may be delaying purchasing until they think the market has improved”.
A belief that ‘imminent’ rate rises will ease property prices was cited as a prevailing reason for purchasers holding off.
“There has also been a significant shift in sentiment on property prices and interest rate changes in 2014,” the report said. “Belief that prices will fall has almost doubled from 25 per cent to 43 per cent.”
The QBE Barometer also reported that the influence of foreign investment on property prices is a growing concern.
“Foreign investment in residential property is certainly perceived as an increasing threat, with 65 per cent of intenders now concerned foreign investment will make property unaffordable, versus 56 per cent in 2013,” the report said.
However, the report added that government data had indicated foreign investors were unlikely to be pricing out many first home buyers from the market.