The latest CoreLogic Housing Market Sentiment Survey indicates that two-thirds of Australians think that now is an ideal time to purchase residential property. However, a significant proportion of those surveyed also believe that the housing market is vulnerable to change, which may prevent many from entering the market. This creates a paradox in market attitudes; one mortgage brokers aim to correct.
Is it a Good Time to Buy a Home?
Some 2,430 Australian residents participated in the CoreLogic Housing Market Sentiment Survey, with more than 60 percent saying that they felt that now is a good time to buy a home. This is a four percent increase on last years figures.
Respondents based in Sydney, where home affordability has risen, are not as optimistic as other respondents about property buying. Only 53 percent said they would consider purchasing a dwelling. However, 57 percent of regional New South Wales respondents stated they would buy now.
More than 80 percent of respondents based in the Northern Territory, Perth and Western Australia stated they thought now is a good time to buy property. This response is surprising given that these areas had experienced record levels of growth in home values before these values peaked, and then dropped.
Survey question: Is now a good time to buy property?
|Region||Yes %||No %|
|Australia Capital Territory||68||32|
|Regional Western Australia||84||16|
|Regional South Australia||76||24|
|Regional New South Wales||57||43|
Source: CoreLogic RP Data
|Age||Yes %||No %|
Source: CoreLogic RP Data
Concerns Over Change in the Housing Market
Economists are shocked that such a large number of respondents, almost two-thirds or 65 percent, said they thought home values could experience a correction in value. As while these results suggest that many respondents are concerned about the Australian housing market, this percentage is 10 percent less than 12-months ago.
However, many interviewees said they expected dwelling values to stay consistent. Tasmanian respondents are the most positive about the growth of home prices.
Of all respondents nationwide, only 38 percent said they expected home prices to rise over the next year. Twelve months ago, around 45 percent said they expected property prices to rise. CoreLogic economists suggest this decrease indicates that not as many Australians expect to make capital gains over the next year.
Of the respondents that felt that home prices would rise, which was one-third of survey participants, 6 percent said that they thought home prices would increase by more than 7.5 percent. Some 80 percent, however, stated that they expect home price increases to be less than 5 percent.
Tasmanian survey respondents are the most optimistic, some 44 percent indicated that they thought dwelling values would rise over the next six months. According to CoreLogic Data home values in Hobart have increased by around 6.2 percent over the last year.
The Rental Market
Despite CoreLogic Data suggesting that the rental market is at its weakest in almost 20-years, only a small number of survey respondents (11 percent), are anticipating that rents will fall over the next year. Nationally speaking, survey respondents were equally divided as to whether rental prices would rise or remain steady over the next 12-months.
The majority of survey respondents say that rents will rise. The exception being Perth and regional Western Australian respondents who state that rents will fall. This expectation is consistent with rental statistics for this state which indicate ongoing rental falls across the state.
The highest level of respondents who feel that rents will increase over the next 12-months are in Tasmania (56 percent). More than 50 percent of respondents in Adelaide, and Regional New South Wales and Victoria feel that rents will rise.
Written by eChoice
Since 1998, eChoice has helped more than 50,000 Australians secure a home loan through its network of over 25 lenders and hundreds of loans. Best of all our service is cost and obligation free!