Concern still rife surrounding australian house prices

Sydney Harbour Photo: Wikimedia Commons

Concern is still rife in Australia surrounding over-inflated house prices.

A survey from CoreLogic RP Data shows that more than two thirds of Australians are concerned that the country's property market could see the pricing bubble burst.

68 per cent of respondents said that they thought Australia's housing market was vulnerable to a significant correction in values. This is an improvement from the previous quarter results where 75 per cent of respondents indicated they were concerned about a significant downturn, but  a significant proportion of the community are still wary of substantial value falls.

CoreLogic RP Data head of research Tim Lawless says; "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.

"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 per cent between October 2010 and May 2012."

More strikingly, 95 per cent of survey respondents believe that foreign demand is pushing dwelling values higher, with nearly one in five indicating that foreign buyers were responsible for placing "extreme" upwards pressure on home values.

The argument has been subject to much debate in the past year, with Lawless  citing the ongoing negative sentiment towards foreign investment as evidence that the true extent of overseas buying of residential properties continues to lack transparency - despite the House Economics Committee Report on Foreign Investment in Residential Real Estate being handed down almost a year ago.