Results released yesterday from the September quarter CoreLogic RP Data - TEG Rewards Housing Sentiment Survey showed that more than two-thirds of respondents are worried about the future of real estate prices in Australia, with 68% of respondents answering yes to the question “In your opinion is Australia's housing market vulnerable to a significant correction in values?”
While that is a high proportion of respondents, it is a decrease from the result of the June quarter survey, when 75% of respondents answered yes to the same question.
CoreLogic RP Data research head Tim Lawless said it’s unlikely that there will be a significant correction, however he did point to relatively recent figures as why some people may hold concerns.
“While we don't envisage dwelling values will fall substantially, the probability of declines in Sydney, and to a lesser extent in Melbourne, after such a strong run of capital gains isn't unlikely,” Lawless said.
“Home values are already trending lower in Darwin and Perth. It was less than three-and-a-half years ago that capital city dwelling values fell by 7.4% between October 2010 and May 2012,” he said.
Though the proportion of respondents who are concerned about a significant correction has fallen, so too has the proportion who believe prices will rise in in the next six months.
In the March quarter survey, 49% of respondents believed prices would trend upwards in the following six months. That fell to 48% in the June survey before dropping to just 40% for the September survey.
That has also coincided with a fall in the number of people who believe now is a good time to buy real estate, with 55% of respondents from the September survey believing it is, down from 60% at the June survey.
Respondents had the most negative outlook for Sydney, with just 29.7% believing it’s a good time to buy in the harbour city.
In comparison, more than 70% of respondents believed it’s a good time to buy in the Australian Capital Territory, Adelaide, regional Queensland or Perth.
While recent research has pointed to slowdown in foreign investors targeting Australian real estate, the survey results do show that the impact of offshore money on affordability is still a contentious issue for many.
Ninety-five per cent of respondents said they believe that foreign demand is pushing residential real estate prices higher, with 19% of respondents believing foreign buyers are placing “extreme” pressure on the Australian real estate market.
While there is some conjecture about the actual impact foreign buyers have on real estate prices, Lawless said the results show there needs to be more transparency from the government in showing the level of foreign buyer activity in the market.
“The latest statistics from the Foreign Investment Review Board haven't been updated since the 2013/14 financial year,” he said.
