The much-debated question over whether house prices will fall or rise in 2016 has been answered in part by a major survey by Mortgage Choice.
According to their 2016 Money Survey, one third of Australians believe property prices will continue to rise throughout the year.
The survey reveals that 32.5% of those surveyed said house prices would increase over the coming 12 months, while a further 25.3% thought prices would stabilise over the next year.
Of the 1,030 Australians surveyed, 25.1% of respondents said prices would likely fall across Australia, while the remainder were ‘unsure’ what would happen with dwelling values.
Mortgage Choice chief executive officer John Flavell said he wasn’t surprised to see Australians were largely divided on the future of the property market.
“How optimistic people are about the future of property prices really depends on where they live,” he said.
“At the moment, the Australian property market is telling two different stories. On the east coast of the country, property prices continue to rise – albeit at a slower pace than previous years. According to data from CoreLogic, dwelling values have climbed across all of the eastern capital cities over the last 12 months.”
Over the 12 months to April 2016, property prices are up 7.4% in Sydney, 9.8% in Melbourne, 4.5% in Brisbane and 3.2% in Adelaide.
Meanwhile, property prices across the western capital cities have fallen over the last year. In Perth, dwelling values are down 2.0% over the 12 months to April, while Darwin has recorded a 1.8% drop in property values over the same time frame.
“Australia’s property market isn’t a single market. It is made up of many different markets, some of which are thriving and some are not,” Mr Flavell said.
“The reality is, the property market is cyclical in nature. In other words, property prices will rise and fall over time. So, while dwelling values have fallen in Perth over the last 12 months, that doesn’t mean to see we won’t see an improvement in this market over the short to medium term.”
Across the country, West Australians were the least optimistic about the future of property prices in their state, with 55.4% of respondents stating that they expect dwelling values to fall over the coming 12 months.
At the other end of the spectrum, Queenslanders were the most optimistic about the future of property prices in their own state, with 46.8% stating that prices would continue to increase.
The majority of Victorians were also optimistic about prices in their state, with 43.0% indicating that prices would continue to rise over the coming year.
“While it is clear property prices will rise and fall in certain markets over the coming 12 months, one thing is clear: the Australian property market as a whole remains relatively robust,” Mr Flavell said.
“Home loan demand continues to outpace market expectations, with recent data from the Australian Bureau of Statistics showing more than $32.8 billion in home loans were approved over the month of February. This highlights the ongoing strength and resilience of the Australian property market.”