More than two-thirds of Australians believe the housing market could suffer a significant correction in values, a new survey has revealed.
The CoreLogic RP Data – TEG Rewards Housing Sentiment Survey found that 68 per cent of respondents said the housing market is vulnerable to a significant correction in values.
However, this figure was down on last year, where 75 per cent of survey respondents indicated they were concerned about a significant market downturn.
The proportion of survey respondents who thought dwelling values will rise over the coming six months has been trending lower, dropping from 49 per cent in March and 48 per cent in June to just 40 per cent in September.
Furthermore, 95 per cent of respondents believe that foreign demand is pushing dwelling values higher, with 19 per cent indicating that foreign buyers were responsible for placing extreme upwards pressure on home values.
CoreLogic RP Data’s head of research, Tim Lawless, said that while he does not predict a substantial fall in dwelling values, the probability of declines in Sydney, and to a lesser extent Melbourne, is not unlikely after a strong run of capital gains.
“Home values are already trending lower in Darwin and Perth,” he said. “It was less than three-and-a-half years ago that capital city dwelling values fell by 7.4 per cent between October 2010 and May 2012.”
The survey also revealed that 55 per cent of respondents thought that the current housing market conditions represented a good time to buy a property – down from 60 per cent in June.
Respondents based in Sydney were the most pessimistic about buying conditions, but 29.7 per cent still thought that now was a good time to be entering the market. Meanwhile, more than 70 per cent thought buying conditions were ripe in the ACT, Adelaide, regional Queensland and Perth.