According to a survey of 43 market pundits by comparison website Finder, just 35 per cent of respondents believe that now is a good time to buy a residential property.
Of the surveyed respondents, 30 per cent said prospective buyers should hold off and wait for the market to settle before committing to a purchase.
This is in contrast to findings from a recent consumer survey by Finder, which found that 59 per cent of consumers believe that now is a good time to buy a home.
The bearish outlook among analysts comes amid a reversal in housing sentiment off the back of the economic fallout from the COVID-19 crisis.
Analysts surveyed by Finder expect the price declines to continue over the coming months, forecasting falls of between 8 to 9 per cent for apartments by the end of September, and just under 5 per cent for houses.
Home lending growth has also slowed, with the latest Lending Indicators data from the Australian Bureau of Statistics reporting that the value of home loan approvals slipped 4.8 per cent to $18.5 billion (seasonally adjusted terms) in April – the sharpest decline since May 2015.
The Reserve Bank of Australia’s (RBA) latest Financial Aggregates data also revealed that housing credit growth slowed to 0.2 per cent for the second consecutive month.
Cash rate expectations
The findings formed part of a larger survey, which gauged analysts’ cash rate expectations.
Unsurprisingly, analysts unanimously expect the RBA to hold the official cash rate at 0.25 per cent, when the monetary policy board meets this afternoon.
RBA governor Philip Lowe has previously ruled out further adjustments to the cash rate, which he expects to remain unchanged “for some years”.
“I have trouble seeing inflation to 2-3 per cent for quite some time. It’s going to be a long, drawn-out process until we get full employment, which means we’re going to keep interest rates where they are perhaps for years,” he told the Senate Select Committee in May.
However, RBA deputy governor Guy Debelle recently noted that the RBA is prepared to provide further stimulus, if required, to support the economic recovery.
“While much of that support is likely to be on the fiscal side, the bank will maintain current policies to keep borrowing costs low and credit available, and stands ready to do more as circumstances warrant,” he said.