PHOTO: McGrath

The housing market has moved “closer to equilibrium” but high levels of household debt will prevent an immediate rebound in prices, according to McGrath chief executive Geoff Lucas.

Speaking to AFR Weekend after the listed real estate agency reported further deterioration in its trading performance this financial year, Mr Lucas said he was “more conservative” about the outlook for the housing market then others.

“Without doubt there has been a general improvement in interest and enthusiasm in the market, which has caused vendors to lift their expectations slightly,” Mr Lucas said.

“But I am cautious about the level of debt and the relatively high levels of household debt.”