Home buyers who purchased in the past three years are the most worried by recent falls in house prices, according to a new survey.
The report from ME bank also showed that the concern was most felt by those buyers in Sydney and Melbourne.
ME’s Property Sentiment Survey of 1,500 respondents indicated the shift in the property market may also flow through to consumer spending.
Overall the results show a market with polarised views based on if you own and when you purchased property.
The key finding is that those who bought property in the past three years are significantly more worried about the impact of prices falling.
Seventy percent of home buyers who had purchased within the last 12 months were the most concerned at 70%. Those who had purchased between one year ago to three years ago were not far behind with 66%.
Only 49% of home buyers who had purchased more than three years ago were concerned about the falling prices.
In a sign that ongoing price falls may hit consumer spending, 49% of respondents said falling prices made them feel less wealthy, while 73% said they would be more careful with their money in future.
In contrast to recent buyers and despite price falls in some regions, first home buyers are still worried about housing being too expensive, with 77% saying they’re worried that housing is increasingly out of reach.
Different opinions are also apparent when respondents were asked what they think will happen with property prices in the next two years, with 38% saying prices will go up, 26% saying prices will fall, and 23% saying prices will stay the same.
Those who think prices will go up outnumber those who think prices will fall in all states except NSW.
But one point on which most Australians agree is that housing affordability is still worsening, with 84% agreeing with this statement.
ME’s head of home loans Andrew Bartolo said, “There’s little point worrying about what will happen to prices short-term if you’re intending to live in a property long-term. Same goes for long-term investors.
“The Australian property market has seen seven price declines-recover cycles in Sydney since 1984 and all have seen prices recover, most within four years.
“When it comes to financial stress banks take a long-term view, focusing on the strength of the economy and healthy employment rather than house prices.
“Two of the factors contributing to prices falls in Sydney and Melbourne are macro prudential requirements and tougher credit assessment rules, which have tightened the supply of credit. Economic growth remains strong and unemployment is low.”