Western Australian homebuyers are the least confident in the nation, according to a report released today, but nearly half of the state’s prospective homebuyers say now is a good time to enter the market.
The Genworth homebuyer confidence index showed sentiment among WA homebuyers experienced the second largest fall in Australia over the past six months, down 4.1 per cent since March 2011.
Only Victorian sentiment plummeted faster, dropping 7.1 per cent since March.
The report said the drop in WA confidence was related to uncertainty over the effects of the mining and carbon taxes, while sharp drops in property prices were contributing to the unease.
According to the latest analysis from the Real Estate Institute of Western Australia, Perth home prices fell 2 per cent to $477,000 in June, for a sixth consecutive quarter of falls.
While property price falls are a cause of stress for WA homebuyers, the report noted they can also be a strong incentive to enter the market.
Nearly half (47 per cent) of WA respondents to Genworth’s survey said they believed now was the right time to buy a home.
Nationwide, the report said 36 per cent of borrowers surveyed believed now was the right time to enter the property market.
The report also found the number of Australians suffering mortgage stress rose to 25 per cent in September, from 21 per cent the previous month.
Genworth chief executive Ellie Comerford said the rise in mortgage stress among home buyers led to a two per cent drop in borrower confidence.
Despite the decline, the report said homebuyer confidence was three per cent higher than levels recorded during the 2008 global financial crisis.
Moreover, overall homebuyer confidence in Queensland improved 4.2 per cent as the state recovered from natural disasters and amid improved property prices.
"If analyst predictions of future interest rate cuts are correct, this may also help support borrower sentiment in the near future," Genworth said.
The report found first home buyers were optimistic about the prospects about buying a home, but existing debt was a hurdle for some.
Younger Australians were cutting back spending on luxury goods, clothes and reducing spending on groceries and other necessities to afford a property.