The latest annual QBE report into mortgage and property market sentiment shows Australian’s perceptions towards the residential property market is deteriorating rapidly amid concerns the market is overvalued.
The survey found only 36 percent of respondents now believe it is a good time to buy property in the next twelve months. This is down significantly from a weak 42 percent in 2013. The reason appears to be the federal budget, with 59 percent intending to hold off and review the impact of the harsh budget.
But perceptions the market is overvalued could be holding just as many back. 59 percent now believe the Australian residential property market is overvalued, with 31% believing the market over-valuation exceeds 10 percent. This has also rapidly increased with only 20% believing the market was more than 10% overvalued last year.
But it is no longer just individuals doubting the fundamentals of Australia’s infallible property market. Billionaire Lang Walker, Executive Chairman and owner of Walker Corporation – one of Australia’s largest property developers, has warned this week house prices in Sydney and Melbourne has surged too much. He is now forced to turn to Malaysia to reduce risk and find growth.
Yesterday, Stockland – one of the largest residential developers in Australia, said double-digit house price growth is unsustainable, and could screech to a halt.
» An annual study of the mortgage market and associated insurance in Australia – QBE, 7th August 2014.
» Billionaire Lang Walker says Sydney, Melbourne house markets ‘too hot’ – The Sydney Morning Herald, 15th August 2014.
» Stockland says double-digit house price growth not sustainable – The Sydney Morning Herald, 18th August 2014.