Across Australia, market expectations have been falling, especially in NSW where home sellers are now the most pessimistic compared to other states.
Last quarter, 4,156 Australian vendors were surveyed with results for those in Sydney being split up into Central, East, North, South and West Sydney.
These insights are put into 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.
For the past few quarters, market expectations in Sydney have been the lowest in comparison to other capital cities.
The negative index of -1.8 during the last quarter suggests that home sellers in Sydney believe property prices will continue to decrease within the next six months.
Market expectations in Central Sydney were the worst last quarter with an index of -3.1.
This is a massive drop from -1.8 in the quarter before last, showing that an increasing majority of Central Sydney vendors believe property prices will be dropping within the next six months.
This pattern is also evident in North Sydney with sentiment dropping from -1.0 to -2.6.
North Sydney has had one of the most steady yet steep declines, going from having one of the highest market expectations around two years ago to one of the lowest now.
The third most pessimistic market expectations are in South Sydney.
Sentiment in South Sydney has been more unpredictable in comparison to other areas of Sydney with the index going up and down over the past few quarters.
Despite having a negative index of -1.6 this past quarter, this is actually an increase from the -2.7 in the quarter before last.
Hence, though market expectations may be getting better, a large majority of vendors still expect property prices to continue falling in the next six months.
West Sydney is another area that has had a steady decline over the past few quarters.
However, the drop hasn’t been as steep in comparison to North Sydney.
Last quarter, sentiment in West Sydney was at an average of -1.4.
Home sellers in East Sydney had the highest market expectations this past quarter.
Despite this, the sentiment is still negative with the average index sitting at -1.1 for last quarter.
Hence, it looks like all areas of Sydney are expected to see property prices drop within the next six months.
Even in the Illawarra and Newcastle regions, indexes have fallen into the negatives.
Central and North Sydney, in particular, are expected to see the largest falls in comparison to other areas of Sydney.
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.