After the market started turning around halfway through the year, vendors in Melbourne have become more and more optimistic about property price movements.
3,306 Australian vendors were surveyed last quarter on the expectations for price movement with Melbourne vendors the most optimistic they’ve been since the beginning of 2018.
In the most recent quarter, 75% of Melbourne home sellers stated that they believed dwelling values were going to increase within the next six months.
To put this into perspective, in the first quarter of the year, only 28% of vendors believed prices were on the rise.
Comparing the most recent quarter to the quarter previous, 83% more Melbourne home sellers now believe prices are going up in the coming half year.
The election results have likely played a part in this high level of confidence from vendors.
On top of this, the increase in dwelling values in both Sydney in Melbourne over the last couple of months has proven that the market is starting to move in the favour of sellers.
Hardly any Melbourne vendors believe that prices will be going down anymore.
At the beginning of the year, almost a third, 32% of home sellers in Melbourne thought that prices were moving in a downward direction in the next six months.
In this most recent quarter, only 5% reported that they believed prices are going down.
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.
In the first quarter of this year, sentiment fell to -0.2, the first negative value for Melbourne in the history of the index.
In the second quarter, it bounced back to +1.4 before soaring to +4.9.
This is the highest the index has been since the beginning of 2018 when sentiment was at +5.3.
Sentiment in Melbourne previously peaked at the end of 2017 at +5.6.
For those looking to purchase property, there’s only a little time to make a move before prices increase even further.
In particular, if you’re upsizing, it’s best to make the move as soon as possible before the gap in price between your current home and new home widens more.
However, if you’re downsizing, it could pay off to wait for the market to improve because the higher price you’ll get for your current home will likely outweigh the higher cost you’ll have to pay for your new home.
Guest author: Ellen Orton is the Head of Business Operations at OpenAgent.com.au, an online agent comparison website helping Australians to sell, buy and own property.