The release of the CoreLogic RP Data Nine Rewards Consumer sentiment survey revealed that a majority of survey respondents think that it is a good time to buy property, despite rising capital city home values over the past three years.
Over the June 2015 quarter, 60% of respondents agreed that now was a good time to buy a property or home however, this proportion fell from 71% of respondents at the same time a year ago, and is down from 80% of respondents over the second quarter of 2013.
A majority of respondents still felt that it’s 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 fall in the proportion of respondents who think now is a good time to buy, particularly in the hottest market Sydney.
The regions where survey respondents were most optimistic about buying conditions were in Tasmania, regional South Australia, Brisbane and in regional Queensland.
This is not surprising given that these regions are yet to see a substantial run up in prices.
Sydney and regional New South Wales based respondents were the least optimistic about buying conditions which can probably be attributed to the high rates of capital that have been recorded over the past few years.
On the other hand, 65% of respondents thought it was a good time to sell; the highest reading in the history of the survey which extends back to the first quarter of 2013.
Sydney and Melbourne-based respondents were the most optimistic about selling conditions
Given the strength of the housing market in these cities, this result comes as no surprise.
Perceptions around selling conditions in the Northern Territory and Perth, where property values are now in decline and listing numbers are rising, were more subdued.
In addition, the survey asked respondents about their expectations for capital growth over the next six and twelve months.
48% of respondents expected home prices to rise over the next six months, while 45% are expecting prices to rise over the next twelve months.
Only 14% of respondents expect price to fall over the coming year.
Respondents in Tasmania were the most optimistic about the likelihood of capital growth for their state with 60% expecting prices to rise over the coming year.
This result confirms an improvement in local sentiment across Tasmania where this market has previously recorded weak conditions but has recently started to show some capital gain.
Sydney and Melbourne also saw more than half the respondents indicating that they expected further growth in property prices over the next twelve months.
Across the country, respondents from regional Western Australia were the most pessimistic about local housing market conditions, with only 14% of respondents indicating they expect prices to rise over the next twelve months.
With attitudes around future capital growth broadly still strong, it is interesting to note that when respondents were asked whether Australia’s housing market was vulnerable to a significant correction, three quarters of respondents felt that it was.
This was the highest reading we’ve received for this question which suggests that despite a perception that prices will still rise, more Australians are becoming concerned about a correction in the housing market.
Respondents based in regional Western Australia, the Northern Territory and Sydney were the most wary about the markets vulnerability, with 86%, 80% and 79% of respondents respectively indicating they were concerned values could fall significantly.
Another aspect of the market surveyed in June was respondents’ perceptions around foreign buying
When asked if they thought foreign buyers were making it more difficult for those living in Australia to own their home, 73% responded yes.
The effect of foreign buying was perceived to be most evident in Sydney, regional New South Wales, Melbourne and Tasmania where are least 79% of respondents thought foreign buyers were making it more difficult for Australian residents to purchase their own home.