Australians have started 2016 with a more positive outlook on the nation’s housing market according to research released yesterday.

Results from the January Westpac-Melbourne Institute Survey of Consumer Sentiment have revealed more people think now is a better time to buy a house than any time since midway through 2015.

The Time to buy a dwelling index in the survey rose by 13.9% over January to 113, up from the 99.2 recorded in December.

January’s figure is highest score the index has recorded since May 2015 and is just 1.4% lower than it was in January last year.

Westpac chief economist Bill Evans said the January figures should be treated with some caution, but the size of the month-on-month increase does point to the likelihood of a more positive outlook on the housing market.

“The sharp increase in the Index in January will reflect some seasonality but the move is so large that we can only conclude that this print may be signalling some improving optimism in the housing market,” Evans said.

“Most of the improvement in the national Index was driven by a sharp improvement in New South Wales which has regularly posted the weakest readings amongst the states in recent times. For this reason it is best to be cautious but nevertheless encouraged by this result,” he said.

The increased level of positivity towards the nation’s housing market is also shown by a more optimistic outlook on the direction of property prices.

“This improvement in the outlook for housing was also indicated in the Westpac Melbourne Institute Index of House Price Expectations. The Index increased by 21.1% in January from 103.7 in December to 125.8 in January,” Evans said.

“The Index is still down by 10.2% over the year but this read represents the best result since September 2015.”

But while the survey shows more people may look to enter the property market in 2016, Evans said those hoping for an interest rate cut to make things easier shouldn’t hold their breath.

“Despite markets confidently expecting that the Reserve bank would cut rates by February Westpac has remained firmly of the view that the Bank will remain on hold throughout the second half of 2015 and the whole of 2016.

“We retain that view despite some concerns from this survey that consumers may slow their spending in response to this current global uncertainty.”