Finding tomorrow’s hot property, TODAY

Still About Interest Rates

A recent headline in the Australian Financial Review newspaper summed up why most of the property price forecasts published in mainstream media are hopelessly inaccurate.

The Fin Review headline declared “house price growth to slow as interest rates bite”, following a survey of economists by the newspaper.

Th survey of 30 economists came up with a median predicted rise in house prices nationwide of just 2.5%, with eight respondents forecasting a decline in property values.

The first error is that the Financial Review, which should know better, has sought expert property analysis from people who are not property specialists and certainly not experts on real estate matters.

The next mistake is the one that economists seem destined to make year after year – the belief that the biggest factor, indeed the only factor, which determines house price outcomes is interest rates.

The error is compounded by the belief that interest rates, which did not “bite” in 2023, would suddenly turn around and “bite” in 2024 – even though it’s likely that there will be no further rises by the Reserve Bank and the next movement in the official rate is likely to be downwards.

Add Your Heading Text Here


Subscribe to our newsletter today and receive a FREE copy of How To Identify Hotspots