The majority of Australian residents believe that the housing market is vulnerable to a significant correction in values, new research reveals.
In a survey of housing market sentiment conducted by CoreLogic RP Data – which surveyed 1,010 Australian residents – three quarters of respondents indicated that a significant correction was possible.
When this question was first asked back in early 2013, 60% of respondents indicated ‘yes’ to this question, and the proportion has progressively risen since this time.
According to CoreLogic RP Data, the increasing number of respondents who think the market is now more vulnerable to a substantial correction suggests buyers are becoming more cautious in their decision making – a factor that may be compounded by the renewed global uncertainty emanating from Europe and China.
Across the regions, respondents from regional Western Australia and the Northern Territory were the most pessimistic about a serious downturn in dwelling values. These are also the housing markets were conditions have shown the most weakness over the past year.
A higher proportion of Sydney based respondents also indicated that they felt the housing market could stage a significant downturn, which may be attributed to the high rate of capital gain over recent years causing some concern about an over valuation in the Sydney market place.
Respondents from Perth were surprisingly optimistic considering the local market is currently seeing dwelling values move lower and economic conditions have weakened since the peak of resources led boom.
As a result, it is not surprising that 65% of respondents said they thought now is a good time to sell. This is the highest reading in the history of the survey, which extends back to the first quarter of 2013.