First National Real Estate State Chair, Ross Nielson, anticipates Victoria’s house, land and unit prices will rise in the coming six months by between 0-5 per cent after experiencing increases of between 10-15 per cent in the last six months, due mainly to a shortage of housing stock.

He anticipates vacancy rates to rise by no more than 5 per cent and that rents will stabilise, again due to poor availability.

Mr Neilson attributes around 10-20 per cent of Victoria’s sales activity in 2009 to investors and expects this to increase by 5-10 per cent in the first half of 2010.

“Investors will continue to be attracted back into the market, after they have been absent for a year or so, as government initiatives impact on the market that is traditionally the space they operate in,” Mr Neilson said.

“Now that much of the stimulus activity is dying down, they are being lured back in with attractive market conditions like relatively low interest rates and less competition at the lower end.”

Interest rates are predicted to increase in the first six months of 2010, and coupled with the removal of the First Home Buyers Boost it is expected there will be a minimal impact on affordability if interest rate hikes are not too excessive, according to Mr Neilson.

The major buyers in the property market are Generation X – those aged between 32 and 45 years and it is predicted sales with this segment will increase over the next 12 months given planned new jobs and businesses in Victoria.

The proposed introduction of the Government’s emissions trading scheme is expected to impact ultimately on the consumer, according to Mr Neilson.

“Something as costly as this is ultimately paid for by the consumer and if the scaremongers are correct, the financial impact could be noticeable,” Mr Neilson said.

With a stable economic outlook, and strong fundamentals underlying the Melbourne market, there is growing consensus that 2010 just might herald a return to a rising market.