BIS Oxford Economics median house price forecasts

Transcription

1 BIS Oxford Economics median house price forecasts While other economists and forecasters may comment on residential house prices, few make definitive forecasts, particularly beyond the next twelve months. BIS Oxford Economics is the only company which produces residential house price forecasts over a three year horizon and places them in the public domain in June each year. s provided by other businesses have often been confused with BIS Oxford Economics forecasts, and some of our previous forecasts have been misquoted, or referred to in different time periods in the media. In order to ensure any debate is factually correct, we have prepared our forecasting record showing our median house price forecasts as produced in our June report each year, compared to the actual result for median house prices. These comparisons are shown in the following charts. An analysis of the first chart comparing a national average for BIS Oxford Economics capital city median house price forecasts indicates that we have generally been conservative. While the forecasts in the and reports were closer to the mark, we were particularly conservative in our and reports, understating the upturn in prices. While BIS Oxford Economics forecast the run up in interest rates through the forecast period in these reports, we underestimated the price growth that would take place in this environment. In our and reports a period of high uncertainty due to high interest rates and subsequently the worst of the Global Financial Crisis BIS Oxford Economics forecast median house prices at the end of the three year horizon were very close to the actual result. s from our report were above actual price growth, largely due to an overestimation of the strength of the Australian economy in the forecast years. Subsequent results from the Census also suggests that underlying demand and the dwelling balance in selected states was lower than initially anticipated, which reduced some of the price pressures. The forecasts published in reports over to have largely picked the cycle in most capitals, although not necessarily the precise pace of price growth. In particular, the Sydney and Melbourne markets have been particularly stronger (as have Hobart and Canberra in compared to the forecast), where higher than expected population growth and low interest rates have had a greater impact than expected on these higher priced markets. In our most recent report, the forecast trend at the national level is for price growth to flatten out in /18 as investor demand steadily weakens. A modest decline is expected to come through in 2018/19, as rising supply removes price pressures and slowing economic growth impacts on purchaser confidence. The results differ from city to city, but are generally expected to follow the same trend as outlined above for the national aggregate, with perhaps some more upside from Canberra and Hobart.

2 Economics reports versus actual median house price over the three year period, Australia Economics reports versus actual median house price over the three year period, Sydney

3 Economics reports versus actual median house price over the three year period, Melbourne Economics reports versus actual median house price over the three year period, Brisbane

4 Economics reports versus actual median house price over the three year period, Adelaide Economics reports versus actual median house price over the three year period, Perth

5 Economics reports versus actual median house price over the three year period, Hobart Economics reports versus actual median house price over the three year period, Canberra 750.0

6 Economics reports versus actual median house price over the three year period, Darwin