Australians are caught in a housing market dilemma, with many hoping property prices will fall to improve affordability while others fear the financial consequences of further declines.

New research from Westpac has found 68 per cent of Australians believe falling house prices would be good for the country, while 67 per cent are concerned property values could drop further.

According to the findings, released on Friday, 82 per cent of Australians said home ownership was completely out of reach for the average person.

The bank’s latest Home Ownership Report found younger generations were most likely to support falling prices, with 78 per cent of Gen Z respondents agreeing it would be good for Australia.

That compared with 69 per cent of Millennials, 67 per cent of Gen X and 58 per cent of Baby Boomers.

Even among existing homeowners, 62 per cent said falling prices would be positive for the country.

However, the prospect of declining values is causing concern for those with mortgages, with 75 per cent worried their property could be worth less.

Westpac chief executive of consumer banking Carolyn McCann said the findings reflected the competing pressures facing Australia’s housing market.

“Affordability remains a significant challenge for many Australians, and these findings suggest many view lower prices as part of the solution,” she said.

“But there is another side to that equation. For many Australians, their home can be their biggest financial asset, so concern about falling values is understandable.”

First home buyers face growing hurdles

The research found 65 per cent of first home buyers believe they will never be able to purchase a property without an inheritance.

When asked what would make buying a home more achievable, respondents pointed to more affordable housing in established suburbs (52 per cent) and lower stamp duty and purchasing costs (48 per cent). 

They also pointed to higher incomes and wage growth (39 per cent) and improved transport links to outer suburbs and regional areas (31 per cent).

The findings come amid continued uncertainty over the property market.

The Reserve Bank has warned that inflation remains too high, with another interest rate increase possible as soon as November.

There has also been concerns that further rate rises could force more homeowners to sell, adding supply to an already weakening market.

Ms McCann said buying a property was a long-term commitment, despite the current uncertainty.

Westpac’s economists expect national property prices to rise by three per cent in 2027.

The research was commissioned by Westpac and conducted by Lonergan Research, which surveyed 1,165 Australians aged 18 and over, between September 18 and 28.