A journalist on a national publication recently asked this question: “Should we be listening any more?” The writer was referring to the latest property price forecasts from National Australia Bank and pointed out NAB’s terrible record on predicting house prices.
I wholeheartedly agree. I wish more journalists would challenge the major banks on their real estate predictions.
It’s not just NAB: the property forecast track record of senior economists employed by all of the Big 4 banks is laughably bad.
I often wonder how senior economists working for Westpac, ANZ, NAB and CommBank keep their jobs, given how often they predict negative price outcomes and are proven spectacularly wrong.
Other high-profile economists like Shane Oliver of AMP Capital also have pitiful records.
All of the usual suspects forecast in late 2022/early 2023 that house prices would fall this year. Many predicted double-digit decline.
NAB late in the 2022 said house price would drop 20% in the next 12 months. Media gave that forecasts enormous credibility.
Here we are in August 2023 and prices are rising in all our capital cities. It’s time we stopped listening.
New data from Domain shows that prices are rising in all major markets across Australia.
Sydney house prices jumped 5.3% in the June Quarter, four times faster than the growth in the previous three months, and the sharpest quarterly increase since late 2021.
Domain says this growth in Sydney as also exceeded the historical average of 2.8%, fuelled by strong demand outpacing the available home listings.
House prices increased across all cities, with the combined capitals’ growing 2.7%, nearly four times faster than the March Quarter.
Melbourne house prices rose 0.4%, which is the first quarterly increase in 18 months, according to Domain.
Brisbane rose 0.9%, Hobart 1.2%, Adelaide 2.8% and Perth 2.2%.
These outcomes come as no surprise to the team at Hotspotting. At the start of 2023, we forecast that prices would rise, moderately, in most of our major markets throughout the nation.
But the big bank economists like those working at NAB – they predicted major price decline and have been proven wrong, yet again.
