A new housing market sentiment survey by CoreLogic RP Data has found 68 per cent of Australians think the property market could suffer a significant price correction.
This is the highest reading the survey has ever recorded for this question.
More than half of all respondents in each region felt that the housing market could see a significant correction.
Interestingly, the survey found respondents from areas where values have seen minimal growth over recent years were most inclined to think a significant correction was a possibility. In Sydney and Melbourne, the proportion was closer to the national figure at 68.6 per cent and 67.3 per cent respectively.
With mortgage rates on hold for the past 15 months to November, 63 per cent of respondents believed rates would remain on hold over the six months from September 2014 to March 2015.
Only two per cent of the 1,021 respondents expected a fall.
However, the survey revealed that over a 12-month time frame, the view does change. From September 2014-2015, 58 per cent expect interest rates to rise; 37 per cent believe they will remain steady, and 5 per cent anticipate a drop.
Over the September quarter, 66 per cent of respondents felt that now was a good time to buy a property, however, the proportion has fallen from 71 per cent of respondents over the June quarter.
“Most respondents still felt it is a good time to buy property, although with the current growth period having run for so long, it isn’t a surprise to see a slight fall in the proportion of respondents who think now is a good time to buy,” said CoreLogic RP Data senior research analyst Cameron Kusher.
“At a national level, a majority of respondents felt it was a good time to buy property, however, there were some variations across the regions,” Mr Kusher said.
“All of the Tasmanian respondents felt it was a good time to buy, while regional areas of Queensland (79.1 per cent), South Australia (80.0 per cent) and Western Australia (75.9 per cent) also felt the time was right to buy."
However, only 52.8 per cent of Sydney respondents and 60 per cent of Northern Territory respondents felt now was a good time to buy.
With Sydney recording the strongest growth in property values over recent years, such a response from Sydneysiders is understandable. Mr Kusher adds that there have been signs of slowing value growth in the NT, which may account for the view of the Territorians.