A Credit Lyonnais Securities survey has found that 76 per cent of respondents would not buy property in the next two years, highlighting the bleak prospects for the housing market in the short term. Analyst Alan Hung found the extreme volatility in property pricing was deterring potential buyers despite the more than 40 per cent correction in prices since last year's peak. Though most respondents believed property prices would stabilise soon, such views did not translate into new housing demand, Mr Hung said. 'The expectation of stagnant income growth and the uneasiness with unstable prices would . . . put considerable pressure on fresh demand,' he said. Only 10 per cent of interviewees would buy a flat in the next year, the survey showed. Due to the weak state of the economy, respondents preferred to rent rather than buy property, it said. 'Short-term demand looks very bleak indeed,' Mr Hung said. To compile the study, Credit Lyonnais interviewed 573 people in locations including Kowloon Bay, Sha Tin and Admiralty during the past four days. The survey found most respondents believed property prices were either 'cheap' or 'reasonable'. The public's views on the property market did not appear to be as negative as the broking industry, Credit Lyonnais said. As only 23 per cent of those polled expected prices to fall more than 20 per cent in the next 12 months, downside risk seemed to be capped, the study said. Sixty-two per cent believed prices would either rise or remain unchanged over the next 12 months whereas the broking industry expected a further 30 per cent correction in prices. Most believed there was little the Government could do to rescue the property market, with higher-income factions having more faith in Government efforts than lower-income groups. 'It appears most people are worshippers of the free market and believe [Chief Executive Tung Chee-hwa] should not do too much to steer the market back,' the report said. With more than 46 per cent of respondents spending more than 40 per cent of their household income on mortgage repayments, there is a suggestion that default risk would rise if macro-economic conditions worsened. The report is the latest in a recent series of extremely bearish research findings made by Credit Lyonnais. Last week, the broker told clients to expect three years of negative growth while bellwether stock HSBC Holdings was likely to fall to $100 a share in the next six months. Among the prominent property counters that Credit Lyonnais has a sell recommendation on are Henderson Land, Hongkong Land, Sino Land and Lai Sun Development. It prefers Cheung Kong, New World Development and Wharf (Holdings) due to their interests in non-property income sources.