Promising news for mortgage brokers – more than two thirds of Australians believe that right now is a good time to buy property.
The results of the March RP Data-Nine Rewards housing market sentiment survey - where 1,030 participants answered questions on what they expected from Australia’s property market over the next six to twelve months – showed 68% think it is a good time to purchase a home.
But while the overall results showed Australians are generally positive about the housing market, the proportion is lower than the results of a year ago – 80% – likely reflecting the current ‘seller’s market’ conditions.
The most optimistic responses came from respondents in areas where dwelling values have not shown a substantial rise over the current growth cycle. But the response from residents of Sydney and Melbourne, where dwelling values have shown a substantial level of growth over recent cycles, was much more muted.
Respondents located in Canberra were also less bullish about buying a home in the current market.
Just over half of the survey respondents (51%) expect dwelling values to rise over the next six months compared with just 41% a year ago, while only 6% of respondents expect values to fall over the next half year.
“Clearly, Australians remain positive about the direction of dwelling values, however most respondents who think values will rise over the coming six and twelve months have fairly measured expectations of value growth with most suggesting values are likely to rise by less than 5% over the coming year,” RP Data national research director Tim Lawless said.
Survey respondents were also asked whether they thought the Australian housing market was vulnerable to a significant correction in dwelling values; 66% of respondents indicated they thought this may be the case. When RP Data asked this question six months ago, 60% of respondents thought the housing market was vulnerable to a significant correction.
Lawless said the high proportion of respondents concerned with this highlights that despite the strong housing market conditions there is an underlying worry amongst consumers about the sustainability of the growth in Australian dwelling values.
“While most respondents think values will continue to rise, it is interesting to note that most respondents are also concerned about the sustainability of dwelling values. At the same time we are seeing transaction numbers continuing to rise and auction clearance rates that are at near record highs. This suggests that market demand remains high despite these concerns.”
“The ongoing debate about a housing market bubble is clearly an issue that has the potential to dampen housing market sentiment, particularly in markets such as Sydney and Melbourne where home values have shown larger capital gains and tend to be higher.”
In the Northern Territory, regional Victoria and regional Queensland more than 70% of respondents thought the market was vulnerable to a significant correction.
Almost half of the survey participants, 49%, believe the most important factor to consider when purchasing a property is their personal financial situation.
Interestingly, the housing market’s prospects for capital growth also rated quite high, with 17% of respondents indicating this was their most important consideration when purchasing a property.
Fifteen per cent of respondents thought the interest rate setting was the most important factor, while only 12% of respondents felt that job security was their most important consideration.