Two out of three Australians believe the housing market is vulnerable to a "significant" correction in dwelling values according to a new housing market sentiment survey.

The March survey of more than 1000 Australians by CoreLogic and TEG Rewards also found weaker appetite from both buyers and sellers to transact in the current market, indicating a mood of growing pessimism.

Buyer sentiment was particularly weak in Sydney with only 50 per cent of respondents believing now was a good time to buy. Only Tasmanian buyers were more pessimistic. On Monday, struggling real estate group McGrath blamed a drop in listings and sales in Sydney's northern suburbs for an earnings downgrade.

Two-thirds of Australians fear a house price crash Judy Green

The 66 per cent of respondents who fear a house price downturn was unchanged from a year ago, but slightly down on 68 per cent who feared one six months ago.

Respondents views were no doubt affected by a widely publicised, but heavily criticised Big Short-themed report by visiting US economist Jonathan Tepper, released in February, which warned of housing market falls of up to 50 per cent in Sydney and Melbourne and 80 per cent in mining towns.