Compared to the previous quarter, a larger majority of home sellers in Victoria believe prices will increase within the next six months.
Last quarter, 4,156 Australian vendors were surveyed with respondents in Victoria having an optimistic view of the market.
These results are based on the OpenAgent Consumer Sentiment Index, a proprietary index system that measures vendor expectations for home price movement.
Vendors are asked whether they believe prices will be Strongly Up, Slightly Up, About The Same, Slightly Down or Strongly Down in their area within the next six months.
Results are then placed on a scale of -10 to +10, with 0 being a neutral view of the market.
At the end of last year, the sentiment in Victoria fell into negative indexes, suggesting that home sellers believed property prices would be decreasing within the next six months.
However, market expectations have bounced back, rising to 0.8 in March.
Hence, the majority of home sellers in Victoria now believe property prices will be increasing or staying around the same.
This increase could be explained by the higher clearance rates in Victoria in the last quarter compared to the previous quarter.
Despite the improvement in market expectations in Victoria as a whole, market expectations in Melbourne have taken a hit.
Sentiment has fallen from an average index of 0.5 at the end of the last year to -0.2 this last quarter.
Even though the market in Melbourne has been cooling for quite a while, reality seems to have only hit home sellers more recently.
This makes Melbourne one of only two capital cities, along with Sydney, where vendors believe property prices will be decreasing within the next six months.
Around this time two years ago, Sydney and Melbourne were in the lead compared to the other capital cities in terms of market expectations.
Hence, market expectations in VIC as a whole have become slightly optimistic even with the dramatic decline Melbourne has seen over the last few quarters.
If you’ve been waiting for property prices in Melbourne to drop, it might be worth waiting a few extra months.
However, if you’ve been looking at other areas of VIC, prices may be on the rise in the near future.
Make sure to do your research into the demand and supply in each area specifically since VIC’s market is incredibly diverse.
Guest author: James Pointon is a Commercial Manager at OpenAgent.com.au, an online agent comparison website helping Australians to sell, buy and own property.