Around two-thirds of Australians think that it’s now a good time to buy a house, while an almost identical proportion believe that the housing market is vulnerable to a significant correction.
That’s the somewhat contradictory finding in the latest CoreLogic-TEG rewards housing market sentiment survey with some of the 2,432 respondents clearly of the view that while there’s risks that prices may crash, it’s still a good time to buy.
You can almost hear the “Australia’s housing market is a Ponzi scheme” crowd already giggling with excitement. In Sydney and Melbourne — Australia’s largest property markets — there have been rises of 88% and 72% respectively since January 2009.
According to Tim Lawless, head of research at CoreLogic, the survey “highlights the paradox in housing market attitudes” at present.
“With such as a large proportion of survey respondents thinking that now is a good time to buy a dwelling (64%), it was surprising to see almost two thirds (65%) also indicated they thought dwelling values could suffer a significant correction,” says Lawless.
While the survey suggest that many are concerned about the prospect of a price correction, Lawless notes that “the proportion is lower from a year ago when 75% of respondents thought the market was vulnerable to a significant correction in values”.
This chart, from CoreLogic, shows the breakdown by region as to whether now is a good time to buy a house.
And here’s the same format, only looking at the breakdown on whether the housing market is vulnerable to a significant correction.
Other interesting findings to come from the survey include that the majority expect house prices to remain steady over the next 12 months while nearly 90% believe that rents will either remain steady or increase over the same period, bucking the recent trend where rents across the country have been falling at the fastest pace of record.
94% also indicated that foreign investors were placing some degree of upwards pressure on Australian home values. 17% say it is placing ‘extreme’ upwards pressure on house prices.
“In Sydney and Melbourne, where the Foreign Investment Review Board reports that approvals for overseas buyers to purchase Australian dwellings has been the highest, showed the highest proportion of respondents that thought foreign buying activity was placing ‘extreme upwards pressure’ on home values,” said Lawless.
“One quarter of Sydney respondents thought foreign buyers were placing extreme upwards pressure on dwelling values, and 22% of Melbourne respondents thought this was the case.”
Recent data released by ANZ showed around a quarter of properties sold in the June quarter of this year were bought by foreign investors, with the vast majority coming from new apartment sales.