11 September 2013
Why don?t we look at some of the company?s predictions over the years that I?ve identified from the tables and charts of publicly available past reports across a number of regions before we make up our minds.
In 2005, BIS Shrapnel predicted the median price for the Melbourne *market in June 2008 would be $360,000 (or thereabouts ? it?s difficult to tell the precise figures from their charts). It benchmarks its predictions against the Real Estate Institute of *Australia?s median price outcomes, which actually showed the median price in Melbourne reached $450,000 in June 2008, a 25 per cent difference.
In that same year BIS Shrapnel said that the median price in Sydney would fall from $500,000 to around $460,000 in 2008. It in fact rose to $546,000, a 19 per cent difference.
Going back to 2002, the median price in Brisbane was predicted to reach $230,000 in 2005. It instead soared to $315,000, 37 per cent higher than BIS Shrapnel?s prediction.
BIS Shrapnel?s forecast for Adelaide was even poorer. They were predicting that prices would rise from $170,000 to $180,000 ? just $10,000 over three years. In fact in Adelaide the median price in 2005 turned out to be $275,000, more than 50 per cent higher than BIS Shrapnel?s prediction.
Since the millennium, BIS Shrapnel has consistently under-projected prices across our capital cities ? at least until around 2010, that is. About then, they became more bullish ? too bullish in fact ? resulting in over-optimism about most of the country?s property markets.
Of course, BIS Shrapnel is not alone when it comes to making incorrect predictions.
Oh, and many will ponder how this is linked to the property market...*sigh*... just follow the economic cause & effect trail. Eventually the penny should drop.
