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.