Confidence in Selling Increases
By Peter Sarmas on 5 Nov 2013
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According to the results of the RP Data – Nine Rewards survey carried out in October, fewer of us believe that now is a good time to buy a home or property, in comparison to an earlier survey.
In a survey with 1,045 participants, a range of questions were asked to gauge expectations around housing prices in Australia and the property market over the next six to twelve months.
Although the overall outlook for the Australian property market remains positive, many are feeling uneasy about the possibility of a big adjustment, signalling concerns over whether the rising property prices across Australia are sustainable.
A Good Time to Buy
The survey reveals that 74 per cent of participants believe now is a good time to buy property, representing a decline of 6 per cent from May 2013 and 2 per cent from October 2012.
The main cause of the reduced optimism can be traced back to the growth of housing prices in some regions.
According to RP Data’s research director Tim Lawless, most optimistic responses generally came from areas where there hadn’t been substantial price rises.
“The survey reveals that 74 per cent of participants believe now is a good time to buy property.”
It follows that Sydney and Melbourne participants are less enthusiastic to buy now, given September quarter’s house price increase was 4.2 per cent and 2.2 per cent respectively for these two capitals (according to RP Data).
Somewhat predictably, the 5 per cent price growth in Darwin for the same period has also turned all Northern Territory respondents against the idea of buying property at this time.
A Good Time to Sell
Surprisingly, the higher prices seen in the current property market in Australia has only convinced 53 per cent of survey participants that now is a good time to sell.
With housing prices growing at above average levels, Sydney and Melbourne respondents are more open to selling now, compared with respondents in areas that have seen lower growth such as Adelaide and Brisbane.
Home Values Expectations and Concerns
A vast majority of respondents expect Australian house prices to rise moderately or remain stable over the coming year.
Those expecting home values to fall in the next six and twelve months account for only 6 per cent and 8 per cent of survey participants respectively.
However, despite the optimism, 60 per cent of overall respondents also feel the Australian housing market is susceptible to a big price adjustment. The level of unease is more prominent amongst capitals where house price increases has been significant.
“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 per cent over the coming year,” Mr Lawless said.
He added that the on-going debate about a housing market bubble was clearly an issue that could potentially dampen the housing market sentiment, particularly in markets such as ACT, Perth and Sydney where housing prices tended to be higher.
More than 65 per cent of respondents in those regions thought the housing market was vulnerable to a sizable correction.
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