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The Rollercoaster Ride of Failed RE Forecasts — How Can They Be So Wrong!?

Updated: Dec 1, 2023


Another week and yet another flipped forecast from one of the major banks.

Westpac Banking Corporation [ASX:WBC] is now predicting Sydney house prices to rise by 10%! Would you ‘Adam and Eve’ it? (For the uninitiated to London slang, that’s cockney for ‘believe’.)


sydneyhom eprices deadline

Source: The Australian Financial Review.

Westpac has significantly upgraded its expectations, tipping dwelling prices to rise 7% nationally this year followed by a further 4% next year.

That wouldn’t be so surprising considering low stock levels, rocketing rents, and record-high immigration pouring into the country.

Except…

In April, Westpac had forecast prices to track flat overall nationally this year, followed by a 5% lift next year. At that point, the bank’s economists expected Sydney prices to lift just 1% this year….

And if we scoot back to their forecast this time last year (August 2022).

Westpac has warned real estate prices in Australia’s two biggest cities could fall by as much as 18% by the end of 2023. Matthew Hassan, senior economist at the “Big Four” bank has warned that the situation looks “bleak” in Sydney and Melbourne…

It’s a great reminder that the major banks have an appalling track record for accurately forecasting movements in the property market!

Read that again — so you never fall into the trap of believing anything they say.

They’re like lousy weather forecasters.

The outlook flips depending on what’s happening in the current moment.

With no overriding knowledge of the property cycle, they’re walking blind.

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