Soaring housing prices are hurting homebuyer confidence, making them more reluctant to buy a home.
The latest Genworth homebuyer confidence survey shows that the number of people who believe it is a good time to buy a home fell to 48 per cent in September, from 52 per cent six months ago.
The rise in Sydney house prices is likely to have hurt confidence, with 25 per cent of people in NSW believing it is a bad time to buy a home, compared to the national average of 18 per cent.
"Two in five prospective first homebuyers indicated that high property prices are the greatest barrier to home ownership, while one in five suggested the barrier is saving for a deposit," Genworth's chief commercial officer Bridget Sakr said.
Of those surveyed, 86 per cent of respondents believe that home prices will either remain stable or increase in the next year.
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However, the news is a bit better for those who already own a home, thanks mainly to record low interest rates.
The number of respondents using more than 50 per cent of their income to service debt fell to 23 per cent in September, from 29 per cent in March.
This coincides with the Reserve Bank cutting its cash rate in May by a quarter of a percentage point to two per cent, which would have improved affordability of mortgage repayments for many homeowners, the report said.
Repayments on a $300,000 mortgage would drop by $45 a month on average if the lender fully passed a 25-basis-point cut in the cash rate by the Reserve Bank.
