Expectations for property prices have soared in Sydney with a growing number of home sellers becoming optimistic about dwelling value movements.
3,306 Australian vendors were surveyed last quarter on the expectations for price movement with Sydney vendors the most optimistic they’ve been since the middle of 2017.
In the most recent quarter, 72% of Sydney home sellers said that they believed property values were going to increase within the next six months.
In the first quarter of the year, only 18% of vendors thought priced were on the rise, a massive difference.
Comparing the most recent quarter to the quarter previous, 82% more Sydney 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 Sydney vendors believe that prices will be going down anymore.
At the beginning of the year, a whopping 43% of home sellers in Sydney thought that prices were moving in a downward direction in the next six months.
In this most recent quarter, only 6% reported that they believed prices are going down.
Regional areas of New South Wales have also had strong expectations.
Three quarters, 75%, of vendors in Newcastle and the Central Coast, and 68% of vendors in Illawarra are expecting an increase in dwelling values.
In terms of metro areas the Inner West, Eastern Suburbs, Northern Suburbs and Sydney City are doing particularly well.
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, sentiment fell to -1.3, the first negative value for Sydney in the history of the index.
In the first quarter of this year, it fell further to -1.8 before picking up again in the second quarter to +0.9.
In this most recent quarter, the index made a massive turnaround with a value of +4.6.
This is the highest the index has been since the middle of 2017 when sentiment was at +5.3.
Sentiment in Sydney previously peaked at the beginning of 2017 at +6.6.
For those looking to purchase property, there’s only a little time to make a move before prices soar 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.