Confidence in the housing market is particularly fragile in the major states and has tumbled to its lowest level in years, according to a monthly report.
The Westpac-Melbourne Institute Consumer Sentiment Index for May, released yesterday, does not paint a rosy picture about public confidence in the property market.
The index tracking assessments of 'whether now is a good time to buy a dwelling' fell by six per cent in May, and is now at its lowest level since November 2010 - when the Reserve Bank had been lifting interest rates - and 25 per cent off its highs of September last year.
Westpac said that in NSW and Victoria the index was down around 30 per cent from those highs, highlighting the tumble is unlikely to be solely driven by the federal Budget.
The banking giant added that respondents have been lowering their confidence levels for several months, with the index already falling 20 per cent between last September and April this year.
The report also showed that waning confidence in the housing market is also apparent in the Index of House Price Expectations. This index fell by 9.8 per cent in May to its lowest level since January 2013.
Westpac believes concerns over high prices and limited affordability are likely to be the key reasons behind these trends.
The overall Consumer Confidence Index fell nearly seven points to 92.9 from last month's 99.7, indicating sentiment well below the 100 average line.